North West Housing Associations fund research into Credit Union

Four housing associations are working with Lancashire County Council to fund research into creating a credit union covering Leyland Chorley and Preston.

Community Gateway Association (CGA), Chorley Community Housing, New Progress and Accent have pledged funds towards the project. Its aim is to establish whether a credit union would work in the area.

Credit Unions are 'not-for-profit' organisations that can offer low cost loans to its members based on the amount they have saved. They are often the first stop for low income households who cannot get a bank loan or who only want to borrow a small amount of money.

Credit Unions are regulated by the Financial Services Authority and members' funds are protected in the same way as deposits in the bank. There are over 330 affiliated to the Association of British of Credit Unions (ABCUL) throughout England, Scotland and Wales

Dave Warlow Director of Operations at CGA said "Many people, particularly those living on low incomes, experience financial exclusion leaving them unable to access standard bank accounts, low cost loans and finance. This can lead to further exclusion from services such as bill payment by Direct Debit and an over reliance on high APR loans and products, often purchased from doorstep lenders. "

The research will look at how we can encourage employers and local busineses to get on board and how we might work with local authorities and voluntary and community groups. This is the first step in a long process in setting up a credit union"