Plough & Share, Devon's own
democratically run financial co-operative, has a service point in
Crediton supported by Sustainable Crediton.
It is open every Saturday morning
in the Community Room at the Fire Station in Charlotte Street
between 1030 and 1200, and run by Sustainable Crediton
So why is that good news, what is a credit union, and can you
There are over 500 credit unions in
the country offering a local, ethical banking service to around a
million members. Their three main aims are to:
- encourage their members to
save regularly. Small amounts are fine;
- offer straightforward loans
to members; and
- provide members with help
and support in managing their financial affairs, if
A typical credit union lending rate
is much cheaper than any alternative for people turned down for
loans by high street banks, who are often forced to use loan sharks
or pay day loans at punitive rates of interest. Although the
lending rate may be higher than the cheapest credit card or loan,
credit unions support their borrowers so debts don't spiral out of
control. The amount of interest a credit union can apply is capped
at 26.08% per annum, whereas doorstep and other lenders do not have
this restriction. The interest on the loan is calculated daily and
is on the diminishing balance; there are no fees for paying off a
loan early or making extra payments.
Plough & Share offers loans to
members which are based on their savings up to £10,000. They can
also offer loans - which are not based on savings - up to £2,500.
The first loan when based on savings is normally limited to twice
the member's savings. First loans have a maximum one year repayment
period. Later loans can be for up to five years, and three times
the member's savings. All loans are given where there is clear
affordability to repay.
Plough & Share also offers a
payroll deduction scheme to help employees save, with members
including Devon County Council and Devon & Somerset Fire &
Rescue Service. In January 2012 credit unions were given new powers
by the Government to widen their membership, and pay interest on
savings instead of a (usually) small dividend.
Credit unions are regulated by the
Financial Services Authority. They can't lend out all their
members' savings, or plough the remainder into anything that
carries too much risk; all savings have the same government
protection as bank savings accounts.
Find out more about credit unions
at: Plough and Share and Moneysaving Expert.