Presentation on theme: "Welcome 03 July 2014. My goal for the day is simple…...to pave the way for more co-operation. To get Housing Associations and Credit Unions to partner."— Presentation transcript:
My goal for the day is simple…...to pave the way for more co-operation. To get Housing Associations and Credit Unions to partner more effectively To build on the excellent examples of partnering we already have To build new alliances and to reaffirm those that already exist Hopefully a day with something for everyone Why?
The impact of financial exclusion People that have survived the recession Changed job (period out of work) Missed car or other credit payments and max’d out a couple of cards Back on course learning to live on less Can’t get credit from any mainstream source Turning to high cost credit out of necessity 12m people BIG business for some
Financial Exploitation Impact of high cost borrowing Limited Disposable Income Credit Union Loan Home credit provider Weekly payment Store £638 £225 £210 £314 High Interest Cash Price
Impact of high cost borrowing People’s living standards Limits the ability to save Impacts household budgets Creates financial stress Reduces money supply in communities Curtails economic growth Contributes to increasing levels of poverty Average savings on a Credit Union loan v. a doorstep lender is £401 (Source DWP) Multiply the savings by the number of loans granted since October 2006 This equates to £4,803,178 over a 73 month period Or £65,797 per month.
What is a Credit Union? Licensed Deposit Taker Members save in a common fund Lender Make personal loans to members Interest Generated Covers for operating costs & reserves Not-for-Profit Surplus repaid as a member dividend Financial co-operative owned by its members (1 member – 1 vote) Operate within a defined area – a common bond Members elected unpaid directors Each sets its own independent operating standards and methods All regulated by the PRA in a similar manner to any other UK Covered by the FSCS £85,000 deposits guarantee
Our borrower profile ABCDE Highly stressed financially with no capacity to repay (Legislation NOT Lending) Has capacity but no intent demonstrated Has limited capacity & has intent Has capacity & has intent but a weak credit profile Has capacity, has proven intent & a good credit profile We do not rely on score cards or automated underwriting but use a face-to-face assessment of capacity and intent
What we can do Put back into the pockets of your tenants money paid in unnecessary interest repayments We can help tenants budget for rent and council tax (some credit unions have already developed specialist savings products – Rent Direct) We can’t do Give financial or debt advice but we can refer Give a loan to someone that can’t repay it
The future Become self-sufficient or cease to exist (reduced WG funding) Attract more members, including people on middle and higher incomes who can save and borrow larger amounts By growing our presence in this middle market, we can improve net interest revenue and continue to off-set the cost of delivering more socially orientated savings and loan programmes to the less fortunate in our Society With only a 2% market share we need to grow We'd like your help