The Co-operative Credit Union must be the preferred option for all its members – or it could end up being seen only as a “lifeboat” for those who are struggling, members were warned at its AGM.
Chair Chris Smith told the meeting, held in Manchester on 25 January, that the credit union’s results showed it in fine shape as it entered its 19th year of operation.
The organisation serves employees, and their families, of many co-operative, mutual and membership organisations throughout the UK. The non-profit, member-owned business says it is an ethical savings choice, offering a safe and convenient way to save via payroll.
Mr Smith said it was vital these services remained relevant to the savings and loans needs of all members, not just those on lower incomes – especially as more people are struggling in a difficult economy.
He told delegates: “Our aim was always to provide members with a simple mechanism of savings, and combined loans.
“Clearly we are fulfilling this aim with an average of £2.4m in lending per annum over the last five years and a massive 96% increase in savings during in the same period.
“However,” he added, “with nearly a quarter (23%) of our members having a household income of less than £20,000 per annum, our credit union has become vital for many to afford home repairs and emergencies such as a washing machine or car repairs.
“Many middle income families have become the new victims of Britain’s growing social mobility crisis. Families earning a combined income of less than £20,000 a year have now joined young people and those on low incomes in being unable to climb the social and economic ladder.
“We are seeing members trying to make ends meet as wages often lag behind cost of living increases. Families are running harder and harder and yet standing still.”
With a failure of political action, he argued, it was important for credit unions to fill the gap.
“Politicians make pledges to make social mobility a key priority,” he said, ‘but rhetoric seems to serve to highlight the problem, not fix it.
“The credit union remains far more flexible and affordable than many other lenders in the market place but the credit union movement cannot be a financial lifeboat as social mobility becomes more and more difficult.
“That is why relevance is so vital. If we are not the preferred choice for members’ savings and loans, then we will merely be seen as a ‘lifeboat’ in many people’s eyes.”
“Yes, we want to serve those members that are in difficulties but we need to further establish the credit union as an efficient, modern, easy, cost-effective and ethical place to save and borrow for all members regardless of their earnings level.
“Our planned substantial investment in new IT will go a long way to ensuring our relevance and will enable us to have the means to offer an even higher level of member service to everyone.”