Why are there so few Credit Unions in Britain?
Credit Unions are non profit organisations run by members for members, which are part of the co-operative movement and run for mutual benefit. They are very much to be encouraged and indeed their promotion is certainly part of the Progressive Pulse vision. However British credit unions have strikingly failed to become widely established despite strong government support (on both sides of the house), leaving the ‘sub-prime’ sector vulnerable to pay-day lenders such as Wonga with very high interest rates which can reach as much as 1509% APR.
In contrast Credit Unions have a capped rate of 1% per month or 12.7% APR.
Err, the rate cap means they can’t attract the deposits?