Credit unions are helping Britons survive – but can they really rival banks?

theguardian.com:

Credit unions have proved a lifeline for many people during the pandemic and cost of living crisis, and now they are being allowed to offer a wider range of products.

Zero-interest loans for people in financially vulnerable circumstances are being trialled, and have so far helped borrowers to pay for items ranging from school uniforms to essential furniture.

At the same time, more than a dozen credit unions have banded together to run a prize draw savings account in which every month one person wins £5,000, in a bid to attract new customers to deposit money with them.

And changes in the pipeline mean they will for the first time be able to offer products such as car finance to their members.

These moves could help make credit unions a serious mainstream alternative to UK banks and other big players. However, some people may be concerned that since January, five have ceased trading.

Credit unions are not-for-profit cooperatives owned and controlled by their members that have traditionally specialised in loans and savings for the less well-off.

There are about 400 of them in the UK, and membership is based on a “common bond”, which might be working in a particular industry or living in a certain area.

To find a credit union that you may be eligible to join, go to findyourcreditunion.co.uk

Supporters say they play a unique role in providing an ethical home for people’s savings cash, and affordable loans to those who may otherwise be forced to turn to high-cost lenders or loan sharks.

In a speech last month (May), Treasury economic secretary John Glen paid tribute, saying that “again and again the sector has lived its core values … putting people before profit and rising to meet the challenges of our times”.

In recent years credit