Credit unions can help to promote a much-needed savings culture in the UK, the Association of British Credit Unions has claimed.
Lucia Webster, a spokesperson for the organisation, said that credit unions carefully examine the finances of individuals before offering to lend them money , thus helping them to avoid unmanageable debt .
Credit unions act as a kitty, where individuals pay a monthly amount into a savings pot and can then usually borrow up to 200 per cent of what they have staked thus far.
Ms Webster also highlighted the local nature of such unions as part of their strength.
"Credit unions promote a saving culture and because they are often community-based they have offices and branches in localities not served by many banks," she commented.
In addition, she claimed that the Department for Work and Pensions has recently provided support to such unions in a bid to help individuals receive the credit that they require.
A study by the Family Resources Survey revealed that 97 per cent of households have some for of savings account , although the majority of these were current accounts.
ABCUL: credit unions promote savings culture
ABCUL: credit unions promote savings culture
Mon, 20 Aug 2007
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