Credit union membership doubles over year

A Credit Union in North Somerset has seen its membership double in the past 12 months – following warnings about the dangers of pay-day loans.

The Somerset Savings and Loans, which was previously North Somerset Credit Union, has seen its membership increase in the last 12 months from 1,000 members to just under 2,000.

The organisation, run mainly by volunteers and with a base in Portis- head as well as a drop in at St Andrew's Parade in Weston-super- Mare, offers people the chance not only to borrow money, but save as well.

People can access loans of up to £10,000 at interest rates as low as one to two per cent (26.7 APR) – compared to the interest rates of 4,317 APR charged by some doorstep lenders and pay-day loan companies.

Somerset Savings and Loans Board treasurer Paul Urch said more people had become aware of the organisation following a high-profile campaign by the Archbishop of Canterbury, the Most Reverend Justin Welby, about the dangers of pay-day loans.

The Archbishop wrote a personal letter to members of clergy across the UK earlier this year urging them to support their local credit union.

The Diocese of Bath and Wells has already given Somerset Savings and Loans £15,000 as part of its commitment to support the service.

Mr Urch, pictured, said: "The credit union works with people who have perhaps never had a bank account or who have become excluded from banking systems due to a poor – or lack of – credit history.

"There has been a lot of publicity surrounding pay-day loans and following the comments made by the Archbishop of Canterbury which highlighted the interest rates which people have to pay when taking out one of these loans.

"The use of Credit Unions such as hours has also been highlighted as part of the publicity which I believe has led partly to the increase in membership numbers."

Mr Urch added that since the service rebranded earlier this year and became Somerset Savings and Loans and launched a new website, meaning users can access the service online, more people had signed up.

People wanting to join the organisation are asked to pay a £2.50 membership fee and deposit £7.50 into their savings account.

At the Somerset branch, loans can be applied for immediately and take about a week to process.

Instead of being paid interest on their savings, savers – as shareholders – receive a dividend each year.

Savers can invest a maximum of £15,000.

Mr Urch said the number of people saving with the organisation had also increased during the past year.

He said: "One of our responsibilities is to encourage thrift and saving and help people budget – not just throw money at the problem."