Working with Community Groups, Businesses and Social Enterprises

Credit unions and community groups, social enterprises and businesses

Changes to the Credit Unions Act 1979 meant that credit unions can now choose to provide services to community groups, social enterprises and individuals.  Credit union membership was previously limited to individuals. 

Local community organisations such as tenants’ associations, youth groups, social clubs and sports associations can  join the credit union and use the financial services it provides, if the credit union's rules allow this.  Local businesses and partnerships could also use the credit union for their financial services, or put some of their money in the credit union.  

Larger organisations which wish to support their local communities can choose to put some money into the credit union, this can help to increase the supply of affordable credit in a community.   Credit unions can also seek investment by offering deferred shares, which are transferable but not withdrawable and are only repayable in limited circumstances.  Deferred shares count towards the capital of a credit union and buying deferred shares is a way that organisations can invest in the strength of the credit union.   

Only10% of  members of a credit union can be corporate members  and there are limits on how much of the savings and loans in a credit union can be taken up by organisations -  at least 75% of shares in a credit union must be held by individuals, as must 90% of loans. 

How to make this happen 

If you want to join as a corporate member, whether you are a small community group or a larger business, talk to credit unions in your area to find out if they are planning on offering services to unincorporated associations and businesses, or see if they could extend their common bond to provide services to all your staff and tenants. 

If you need to find a credit union you can visit www.findyourcreditunion.co.uk or contact ABCUL on 0161 832 3964.