Administrator appointed at failed Solent Credit Union

The credit union has debts of more than £500,000 after exposure to bad loans

Southampton’s Solent Credit Union (SCU), which collapsed in October with debts of more than half a million pounds, has gone into administration.

Administrator PKF Geoffrey Martin said the credit union had failed after many of its borrowers defaulted on loan payments.

This was in spite of grants from Southampton City Council – with a one-off grant of £15,000 in 2018, and annual grants up to £25,000 – along with donations from SCU’s own directors. The administrator added that the council and directors are unlikely to be repaid.

However, the Financial Services Compensation Scheme means that savers with the credit union will not lose any money.

When the credit union failed in October, the BBC reported it had declared aa loss of £48,000 in 2017, blaming bad debt expense, and had already changed its loans policy in 2016 to reduce the number of high-risk loans.

Sector body the Association of British Credit Unions told the BBC that SCU’s failure was not a sign of problems in the sector, and was down to its own vulnerability to bad debt.

Queries about SCY can be directed to the Joint Administrators Dina Devalia and James Sleight of PKF Geoffrey Martin & Co Limited.