A campaign is aiming to promote the benefits and raise awareness of credit unions to a wider audience.
Currently, around 400,000 people across Scotland are part of a credit union – roughly just seven per cent of the population.
A recent survey revealed that one in five people had not heard of credit unions, and only two-fifths of those questioned thought they would be eligible to be a member of a credit union.
The survey also found that one in four people wrongly believed that credit unions make profits for shareholders, just like banks.
The campaign – ‘People, Not Profit’ – aims to highlight that credit unions are not-for-profit organisations, providing loans and savings, and that most people living in Scotland would be eligible to join at least one credit union based on where they work or where they live.
Aileen Campbell, Cabinet Secretary for Communities and Local Government, said: “In helping build a fairer Scotland, we want to protect people from getting into unmanageable debt and falling into the hands of predatory, high cost lenders.
“A key part of this is making sure that people are aware of the financial services and fair alternatives available, including credit union membership.
“Our new campaign will highlight the benefits of joining a credit union. I would encourage everyone to visit the new website to find out more.”
Michael Sheen, actor and social activist, has worked with the Scottish Government to produce a short video explaining what a credit union is.
He said: “I’m very pleased to be backing the ‘People, Not Profit’ campaign, and I share the Scottish Government’s ambition to grow and raise awareness of this sector.
“I’m a member of a credit union myself, and so I know first-hand the benefits they offer.
“What’s important to me is that they are owned by the people who actually use their services, and any profits that they make are invested back into the credit union.”
A new website has been set up to support the ‘People, Not Profit’ campaign. Here you can find out more information and details of which credit unions you could join.
Credit Unions – Frequently asked questions:
• What is a credit union? A credit union is a place where you can save your money and get loans at competitive rates. What makes credit unions different is that they’re not-for-profit, so any money they make goes back to the people who use them via their rates and dividends.
• How do credit unions work? The money credit unions hold in savings accounts (and in some organisations in current accounts) is loaned out to other customers who need to borrow money at an affordable rate. They’re based in communities around Scotland.
• Are credit unions banks? Credit unions are not banks – although they do offer many of the same services and follow the same rules and regulations. Unlike banks, credit unions are owned and controlled by the people that use their services.
• What are the benefits of using a credit union? The main benefit of credit unions is that they exist only to serve their customers. They also take in to account your own personal financial situation, provide a friendly service, and are based in communities around Scotland.
• What services do they offer? Every credit union is different but most offer loans and savings accounts. Some credit unions also offer things like online banking, current accounts and mortgages.
• What kind of rates can I expect? Credit unions offer competitive rates on loans and savings. Rates vary across the year, and depending on the credit union, so it’s worth visiting your local credit union to find out more.
• How do I join a credit union? You can usually join a credit union in a few different ways e.g. by going online, speaking over the phone or visiting in person.
• Is my money safe in a credit union? Absolutely. Just the same as banks, credit unions are protected by the Financial Services Compensation Scheme (FSCS). FSCS protects savings and current accounts up to £85,000.