Meeting of the Parliament 17 September 2019
I welcome the Government’s commitment to seeing the credit union sector grow and thrive. I also welcome the cross-party support in Parliament for credit unions.
Owned and controlled by members, and with membership being based on a common bond, credit unions are underpinned by the co-operative ethos of people helping people. They are committed to maximising the quality of the services that are provided to members, not to maximising profit for shareholders.
As has been mentioned, membership of credit unions is based on a common bond—an area or a group of people. Everyone in Scotland has access to at least one credit union that they could join, from which to access an extensive range of services.
Credit unions have long played an important role in serving people in our communities who are typically excluded from, or underserved by, mainstream financial services. It is important that the sector has the strong ethos that people who do not have other credit options should not be charged a premium. My constituents are served well by 1st Alliance Credit Union Ltd, in Kilwinning. As well as supporting a diverse range of savers and borrowers, it has been involved in addressing the challenges that many people in our community face.
A survey of the Association of British Credit Unions Ltd’s members in 2018 showed that most credit unions, unlike commercial lenders, do not have a minimum sum that they would lend to a member, and that a large majority—86 per cent—would consider lending to a member whose only income is derived from benefits.
The credit union sector is responsible, profitable and self-sustaining. However, there is a strong case for investment: growth in the sector is of great social and economic benefit. The commitments in the programme for government to a £10 million credit union investment fund, and to developing a national strategy, are much welcomed. I am glad that the motion states that the strategy will be co-produced with the sector. It is important to recognise that credit unions all have in common the fact that they are owned and controlled by members, and that the emphasis is on providing the best service to those members rather than to maximising profit. As the cabinet secretary said, there is diversity in the sector, and it is important that all voices are heard.
At our latest meeting, the cross-party group on credit unions discussed technology: investment in technology has real potential to assist. We know that high-cost credit is easily obtained on digital and mobile platforms, and that consumers expect to do their banking on their tablets and phones, so credit unions being able to reach potential members on their mobiles and tablets would be hugely beneficial. However, it is important to recognise the risks and challenges that need to be addressed in order to deliver that.
It seems to me that, with support and investment from the Government, ethical and appropriate solutions for all sizes of credit union could be found that would open up the benefits of credit unions to even more Scots.
I started my speech by welcoming the Government and Parliament’s shared commitment to seeing the credit union sector grow and thrive. I look forward to working with all who want that.
15:05