In the UK there is increasing acceptance that credit unions have a potentially important role to play in the provision of affordable credit to all sections of society, including those facing financial exclusion. Against this backdrop, this study seeks to identify current patterns of credit union development, quantify the performance of credit unions and isolate those factors which make some credit unions more successful than others.
The study considers the financial profile of UK credit union movement, examining the relative performance of credit unions for the UK as a whole and separately for Northern Ireland, Scotland, England and Wales. It also uses case studies to explore key trends within the sector, including consideration of recently established 'fast growth' credit unions, which have received pump priming from their local authorities, as well as a number of merging credit unions.
Building better credit unions provides descriptive statistics conceptualising the UK credit union movement; outlines the differences in the profile of credit union penetration within the main UK regions; considers recent legislative amendments; investigates why some credit unions perform much better than others and identifies a series of policy recommendations needed to strengthen the sector.
This report will be invaluable to the management and board of individual credit unions, the decision makers in the various credit union trade associations, the credit union regulator and policy makers in the arena of financial inclusion in central and local government.
Peter Goth is a researcher at Queen's University Belfast. Donal McKillop is Professor of Financial Services at Queen's University Belfast. Charles Ferguson is Senior Policy Adviser with Volunteer Development Scotland
Introduction; UK credit unions (structure, legislation and financial exclusion); Performance measurement; Newly formed 'fast growth' credit unions; Case study analysis of UK credit union mergers; Factors driving differential credit union performance; Summary and recommendations.