5th January 2006

Our District Councillor John Fuller writes about a ground-breaking savings-and-loan scheme in South Norfolk that is putting loan-sharks out of business.

If you want to buy a house you might go to the building society. If you want to borrow a few thousand to buy a car you’d approach a bank … but what if you unexpectedly want to borrow a few hundred pounds to replace a washing machine or you’re a student wanting to plan the purchase of a moped to get to college? You could approach the South Norfolk Credit Union!

The South Norfolk Credit Union is a savings co-operative owned by local people offering an easy and convenient place to save small amounts and access low cost loans when required. It’s registered with the Financial Services Authority so the money is safe and it’s completely independent of The Council.

Members make regular contributions into savings accounts which create a central pool of funds. This is used to provide loans back to the membership at very favourable rates. The interest generated from the loans is used to cover administrative costs, with any surplus returned to members as dividends.

Most members save a much less than £5 per week and, when they’ve built-up a small balance, they can use their savings to borrow much more. Loans are not available without savings. A member must save regularly, usually for a three month period before becoming eligible to apply for a loan and this encourages a savings habit. The interest rate is low and is probably less than interest rate from credit cards. It’s also capped by law to no more than 1% a month on the reducing balance (12.68% APR).

We have the credit union so that people who need short-term loans for relatively small amounts do not have to rely on loan-sharks who charge extortionate fees.

I’d like to recommend the Credit Union to all local residents. Regular saving is a good habit and you never know when the washing machine is going to break down or your car needs an expensive spare part and a Credit Union loan can make your savings work harder.

The South Norfolk Credit Union is well run and based in Long Stratton. Linda Sinclair of 26 St Peters Road, Brooke is our local representative and she can explain how you might benefit. Alternatively you might want to volunteer to help this social-enterprise. If you’re think the Credit Union could help you call 01508 533842 and speak to one of the friendly staff.