Supporting the local economy
One of the goals of the credit union is “to contribute to the economic regeneration of the Liverpool City Region.”
We do this in a number of ways...
Boosting financial resilience
Local residents become more self-reliant if they have assets. This is achieved by saving regularly and building a safety net.
In turn this supports sustainable local economic growth.
Other ethical savings often benefit other geographical areas, including globally. Our members savings are only used locally to promote financial well-being by funding lending within the City Region.
We also build savings through lending. A proportion of a loan repayment is allocated to a savings account. Save As you Borrow means that by the time a member has repaid a £1,000 loan, they will have built up around £250 in savings.
Members have saved £10m with the Credit Union. Their savings and fully protected by the Financial Services Compensation Scheme
Supporting economic growth through prudent lending
CLCU is for anyone living or working in the Liverpool City Region. Services benefit those on the lowest incomes who are unable to access mainstream financial services. Such financial exclusion imposes real costs on individuals, families and local communities.
HM Treasury and the Department of Work & Pensions, found that people on the lowest incomes were spending almost a third of their income servicing debt, compared to an average of 10-15% among the general population.
Because of our financial education work this is much lower for Credit Union members at just 3%
We also help improve the diversity of the Region’s economic infrastructure through business lending. Providing microfinance to the local voluntary and community sector, small businesses and social enterprises is an essential boost to the social economy of our neighbourhood and a well-functioning civil society.
Over the last two years we’ve provided £250k of loans to local businesses
Retaining money locally.
Access to affordable credit keeps more money local. The New Economics Foundation estimate that every £1 spent locally, is worth £1.70.
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.
We return our profit to the community through a dividend, increasing local wealth. Whereas most financial institutions would seek to repatriate their profits to remote shareholders, CLCU returns its profits to local residents.
In 2018 we distributed £85k of profits to the local community, including to our junior savers.
Preventing costly evictions
From our experience people in rent arrears have other debts. Often this includes high cost credit agreements with interest rates of more than 250%.
Door to door collectors have more resources available to recover debts than landlords. Consequently, residents often repay these debts rather than their rent, 'exporting' the cost of debt to local authorities and housing associations, which may have to commence recovery procedures.
By encouraging take-up of low cost loans we will offer an alternative to high cost credit, freeing up income to pay essentials. As a result fewer tenants face repossession.
This saves social landlords at least £6,000 for every eviction.
Providing paid and volunteer work opportunities
We provide training and work experience for members. This improves mental well-being, helps people gain new social and work skills. It improves labour market accessibility.
We currently train and support over 40 volunteers