Shariah Compliant Credit Union Product Research Presentation of Findings Prepared for: DWP Financial Inclusions Champion Initiative (West of Scotland) Date: June 2010

Assenti Research commissioned to establish interest in a Shariah compliant credit union product among Glasgows Muslim population Key research objectives to determine: Current usage and attitudes to financial products and services Knowledge and understanding of Credit Unions Interest in a Shariah Compliant Credit Union account and products Background & Objectives

Quantitative approach was used face-to-face interviews conducted in Glasgow All interviewing was undertaken by Taylor Mackenzie All respondents practicing Muslims and financial decision makers Loose quotas were set on age to ensure that the sample reflected the local Muslim population. Analysed using Snap Method & Sample

Final Sample Structure – Age Quotas Quota % Achieved % Quota No of Interviews Achieved No of Interviews Total

Demographic Profile

Gender: 61% male, 39% female Age: Reasonable spread of ages – Minority in the 60+band (11%) Employment: Two thirds (68%) in employment full time /part time or self employed. 16% looking after family Majority (90%)have more than one adult in the household- Majority are families with children (82%) Over half (59%) in rented accommodation private or social, a third (36%) owner occupier Summary of Demographics

61% male and 39% female Age and Gender

Adults in Household

Majority have children under 16 (82%) Number of children (under 16) in household

Employment Status % Employed (full time or part time)54 Self employed (full or part time)14 Looking after home /family16 Full time education9 Unemployed and available for work3 Retired3 Permanently sick /disabled1 Base: 206

Housing Status

Financial Decision Maker

Current Financial Product Holdings Yes (%) No (%) Current Account (Bank or Building Society)8119 Insurance (Home contents etc)3664 Mortgage3565 Savings Account (Bank or Building Society)3367 Credit card2971 Personal loan from a family member1684 Bank Loan991 Personal Loan from a friend595 Credit Union Account298 Base: 206

No of adults with bank/CU account vs no adults on household

Credit Card Usage AgreeDisagreeDont Know %% I pay off my balance every month 8317 I use my credit card to help me spread out payments for large purchases I dont pay interest on my credit card I use my credit card to help me juggle my finances Base 60

Reasons for self/other adults in household not having bank account ReasonSingle Most Important reason No need7062 Not compliant with Shariah Law2815 Language Problems244 Dont have regular income1811 Dont trust banks76 Convenience31 Cant empty the account when I need to2- No banks or credit unions near my home-2 Base 178

Value of Current Savings

Usual method of bill payment

Sources used to meet unexpected bills Up to £500£500- £1000 £1001- £2000 >£2000 %% Borrow from friends/family Bank loan Credit card8556 Borrow from an unlicensed loan provider 1235 From existing savings Base 206

Ever taken a loan from a non–regulated source

Relative importance of financial product features Very important Quite Important Neither Nor Not very important Not at all important %%% Interest charges Trust Compliant with Shariah Law Location of service provider Used them before Base 206

Knowledge and attitudes to Credit Unions

Knowledge of credit unions

Knowledge of credit unions TrueFalseDont know %% You can save and borrow money with a credit union Credit unions are just like banks You can repay a credit union loan early without a penalty You have to have savings to take out a loan I dont know much about credit unions Base: 118

Interest in Shariah Compliant Credit Union Product

Interest in a Shariah compliant credit union product Reasons for interest: borrow/save within confines of Shariah Law (97%), money would be safe (57%)

Reasons for not being interested in Shariah compliant credit union product

Preferred locations to access Shariah compliant credit union product

Should Shariah compliant credit union be authenticated

Interest in other Shariah Compliant Products

Level of borrowing interested in % Up to £5002 £500-£10003 £10001-£15003 £1501-£ Dont know74 Base 95

Conclusions and Recommendations

Opportunity to increase access/ uptake of a wider range of financial services amongst the Muslim community current accounts are held by a majority, lower incidence of mortgages, savings and loans Based on our findings we believe there is a need for a Shariah Compliant Product. Essential for this product to have a number of specific characteristics namely products on offer must be within the confines of Shariah Law prefer to access through the Mosque authenticated by the Imam of the Mosque cash must be one of the payment methods on offer Conclusions and Recommendations (1)

To optimise product appeal and uptake awareness and knowledge of how a credit union works must be improved differences from more traditional providers develop trust for long term relationship Conclusions and Recommendations (2)

Shariah Compliant Credit Union Product Research Presentation of Findings Prepared for: DWP Financial Inclusions Champion Initiative (West of Scotland) Date: June 2010