London borrowers look to credit unions as payday alternative

One of the capital’s credit unions has seen a 47% increase in membership as borrowers look to avoid payday lenders. For the year ending September 2014, London Capital Credit Union has...

One of the capital’s credit unions has seen a 47% increase in membership as borrowers look to avoid payday lenders.

For the year ending September 2014, London Capital Credit Union has reached 10,062 members and seen a 62% increase in loans to members to £5.6m. At the same time, members’ savings have increased by 59% to £6.6m.

Martin Groombridge, chief executive of the union, said: “Our growth means that we are now helping over 10,000 people keep clear of payday lenders and other high interest doorstep lenders. As a member-owned co-operative, we are driven to improve the financial well-being of our members.

“For too long people in our communities have been exploited by money lenders with a focus on profit and greed. Credit unions like London Capital are fighting back by offering fair and affordable loans and savings and we’re pleased to be helping record numbers of people.”

London Capital provides secure savings and low cost loans for anyone living, working or studying in Barnet, Camden, City of London, Hackney, Haringey or Islington.

Mr Groombridge added: “We estimate that our members will have saved £6.5m in interest, charges and fees by switching their borrowing to us from payday lenders and other high interest lenders.”

As it was closing its year end, the co-operative accepted a merger from Radio Taxis (London) Credit Union, whose members unanimously voted to merge. The deal will see the formation of an enlarged organisation with some 11,000 members and £7m of assets.

Peter Gordon Brown of Radio Taxis said: “There is a greater need than ever for a more ethical source of financial services. People are still paying too much for borrowing and being discouraged from saving. This merger will make a larger and stronger Credit Union that will better serve many more thousands of people in years to come.”

Mr Groombridge welcomed the vote: “We are very pleased to be welcoming the members of Radio Taxis Credit Union to London Capital and we are already looking forward to offering their members the full range of our products including our full online service.”

Radio Taxis Credit Union was set up to help London taxi drivers and their families get access to affordable credit and secure savings.

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