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Lending 'bank' grows to meet huge demand
Buy this photo » Customer Alan Fowler, left, with Oxford Credit Union manager Richard Joseph
OXFORDSHIRE is to get its first countywide credit union as demand for the service continues to rise.
Until now, Oxfordshire was one of only three counties in the UK without a credit union across its whole area, but the Cowley-based Oxford Credit Union has been given the go-ahead to expand beyond the city.
Mark Luntley, 52, chairman of the Oxford Road-based union, said: “In the next couple of months we will push quite hard to increase our membership.
“At the moment we are a medium-sized credit union but we would like to be bigger.
“We cannot just set up offices around the county so we are looking at having a mini office in Didcot, to have a collection point where people can deposit money and talk to people about their finances. We are in discussions with Soha housing association about that.”
The union was established in 2006 and currently has about 1,100 members and savings of £300,000.
One of its members is Wolvercote resident Alan Fowler, 50, who says the union helped him get a job.
He said: “I was unemployed when I first joined and I needed a loan to keep my car on the road. There was no way I could afford my car tax or insurance on benefits and I needed my car for a course I was doing and to look for jobs.
“The credit union helped me get a job in the end and I have been in the same job for two years. Getting that loan was a one-off for me but I still bank with them because it is not a big faceless concern. It is like banks used to be.”
Of the current savings, about £200,000 is out on loan at any one time, with the average loan estimated at about £800.
Until it was given permission to expand late last year by the Financial Services Authority (FSA), which regulates UK banks and financial services, the credit union was limited to taking on those who lived or worked in Oxford.
In 2011, Oxfordshire County Council spent £9,000 funding a study into whether a countywide credit union should be set up.
As a result the Oxford Credit Union applied to the FSA.
Mr Luntley said: “If people save with a credit union they know their money is staying in Oxfordshire and benefitting its residents rather than disappearing.
“Quite often the people who save with us would go to a pay-day loan company and our interest rate is much lower than what they charge.
“We aim for the credit union to be for people from all walks of life but many of our members don’t want to use traditional banks.”
Manager Richard Josephs said: “There are certainly many more inquiries coming from across the county from people wanting to join.
“I think it is partly to do with the economic environment, but also people are wanting to find a more ethical place to put some money. There is a general anti-big bank feeling at the moment.”
- A credit union is a financial institution owned and controlled by its members
- It provides credit at a competitive rate to those unable to get it elsewhere. All profit is returned to members
- Credit unions aim to help those who have fallen on hard times but who cannot borrow from a normal bank and may be considering going to a loan shark or pay day loan firm
- Credit unions have become increasingly popular during the recession, particularly among those who have lost confidence in traditional banking
- In March 2012 there were 887,965 adult members of UK credit unions – double that in 2002
- Visit oxfordcreditunion.co.uk or call 01865 777757