We are very pleased to publish our Covid-19 Impact Report.
Meeting borrowing needs
8 in 10 borrowers told us that some or all of their loan was used to support them to meet Covid-19 related expenses.
Loans have helped with home education and cashflow. Self-isolating members have purchased their own Personal Protective Equipment.
Over 60% of people borrowing since 23 March said that if the lockdown continues they may need to borrow again.
Importantly, this money has gone where it’s needed the most.
86% of all loans were issued to people living in the top 20% most deprived wards in England.
Furthermore, there’s a double whammy in the area around our head office. 1/3 of people over 40 living in L8 have health conditions requiring self-isolation.
Saving money compared to high cost credit
Borrowing from a high cost lender costs 1.65 times the amount borrowed.
However, borrowing from Central Liverpool Credit union costs, on average, just 1.08 times the amount borrowed.
75% of borrowers are vulnerable to using high cost credit.
Compared to these pay day or doorstep loans, your Credit Union saves local residents £2.8m in excess interest payments every year.
A lasting legacy
We like to give our members a nudge when it comes to saving.
Through our Save as You Borrow scheme, a proportion of the loan repayment is allocated to a savings account which cannot be accessed until the loan is repaid, reducing the need to borrow in the future.
Because of this, within two years of joining, borrowers have around 20% of their outstanding loan balance held as savings.
Furthermore, this increases to 45% after five years’ membership.
Almost two thirds of members with more than £100 in their savings accounts live in the lowest income areas.
And this has a positive impact on financial wellbeing too.
As a result, 65% of CLCU members are confident managing money compared to 58% across the UK.
Additionally, 55% of members think it’s important to save for a rainy day. Only 40% of people across the UK would agree.
Improving financial health
In our recent survey, over half of respondents told us that they were interested in financial education course run by the Credit Union.
After summer we’ll be piloting a new mobile app which members can use to track their financial health. The app will be used to let applicants know how to improve their credit profile, increasing the chances of getting a loan.
Three Financial Health Indicators will show movement from red through amber to green. Because of these, borrowers will be provided with tips, making it more likely that loan decisions move from ‘no’ to ‘yes’. Then, when the lending criteria is likely to be met, a ‘one click’ loan application is sent to the Credit Union.
We are looking for members to help us test this new app and understand more about your financial health.
If you are interested in taking part, fill in the form below.