Plans hatched for a Credit Union in Cheltenham
PLANS are in the works for a new Credit Union in Cheltenham to help people through the economic downturn.
Borough councillor Paul McLain (C, Battledown) is keen to kickstart the initiative in the town in a bid to help people with their money.
A credit union is a profit sharing, community run financial co-operative which offers savings and low interest loans to all of its members.
The members own and manage their credit union themselves. People pay in however much they can afford in installments and they can then apply for loans with interest charged at just one per cent per month on the monthly reducing balance (12.68 per cent APR).
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"It is very early days, but it is something we need to explore in detail," said Mr McLain.
"There have been various attempts to set up a credit union in Cheltenham without success, but we need to look at how we can better deal with credit loans.
"Some banks have had a lot of bad press and many people don't trust them anymore, rightly or wrongly, so perhaps a credit union is the way."
Credit unions started in Germany more than 150 years ago, then spread throughout Europe, to North America, Canada and Asia.
Their popularity is steadily increasing throughout the UK both in communities and the work place, such as within the police force, British Airways, fire service and local authority employees.
Mr McLain added: "Credit unions come with a confidence that people need at the moment. They work better when they are community specific rather than over a large area, so that is something we should look at."
Credit union paypoints are situated in various buildings across the country in order to make saving easier.
Andy Hayes, manager of Hester's Way Partnership, said there used to be one at the Resource Centre, in Cassin Drive, but it was removed 18 months ago. He doesn't believe another credit union is needed.
He said: "I know there is a Gloucestershire Credit Union, so I think we just need more paypoints. We did used to have one, but not anymore. If we had more paypoints then I'm sure people would be more inclined to use the service. They are very useful though and I would recommend people living in Hester's Way to join one."
The three aims of a credit union are to encourage its members to save regularly, to provide loans to them at low rates of interest, and to give them help and support on managing their finances.