North Wales Credit Union Group
Friends and Credit Unions
Friends in North Wales, with support and help from QPSW, wish to raise awareness of the problems of financial exclusion from mainstream financial services and credit provision and to promote an ethical alternative to the legal and illegal loan sharks. We are keen to encourage members, attenders and all local Quaker meetings to be active in supporting their local credit unions.
So, what's the issue?
Many people want a loan and, cannot, for many reasons, access the loan facilities at their local banks or building societies. For example, they are not permanently employed, do not have a bank account, are a tenant (rather than a homeowner), have a County Court judgment against them or have a poor credit rating score.
Sadly, too many of these people turn to illegal local money lenders, the local (‘doorstep’) Provident agent, one of the (‘payday’) loan companies/websites; all of whom charge exorbitant interest and ruinous late payment charges. Very often, such loans are ‘rolled over’ into new more expensive loans. Crucially, such loan providers are not concerned with offering customers good financial advice and ensuring repayments are fair and manageable.
A 2016 Citizens Advice ‘Understanding Society’ report details statistically how these very high interest loans lead to people having unmanageable debt which in turn leads to high instances of family breakdown, employment and housing problems and poor physical health.
The survey looked more closely at the link between unmanageable debt and poor mental health. It was found that people with unmanageable debt are 24% more likely to have a low mental health score, if in the bottom income quarter of the population.
When looking at the relationship from a different angle, comparing the population as a whole with people with below average mental health scores, people in the bottom income quarter of the population are:
The close relationship between unmanageable debt and poor mental health is a ‘two-way causation’. Debt can both contribute to, and be a product of, poor mental health.
A 2012 House of Lords report on credit unions and financial exclusion found that more than 50% of people who have loans demanding very high interest payments have never heard about credit unions or how they operate and an even higher percentage are unaware of the presence of their local credit union.