Borrowers seek divine intervention as 11 million would turn to a church credit union
Press Release - 24 June 2014
- A third (32%) of Brits would approach a credit union for a short term loan – and three quarters (72%) would consider doing this via the church
- However, two fifths (39%) wouldn’t consider a credit union and 29% are unsure
- Further education needed - two in five (37%) are not familiar with credit unions
- Independent price comparison site also needed to show all available options
The launch of the Church of England’s new ‘Church Credit Champions’ initiative has been met with encouraging early signs that could equate to 12 million UK adults credit unions instead of payday lenders, according to Amigo Loans.
New research from the UK’s largest guarantor lender reveals a third of Brits (32%) would consider approaching a credit union should they ever require a short term loan, and of those individuals, two thirds (72%, or 12 million) would be open to approaching their local church for their short term borrowing needs.
However despite this initial optimistic outlook, there are still two fifths (39%) of Brits would not consider approaching a credit union for funding, and almost a third (29%) who are unsure about whether they would approach them for help. Lack of understanding and familiarity around credit unions is the top reason for avoiding them (55%), while a third (34%) are reluctant because they do not know how the credit union system works. A fifth (19%) would not approach one because they don’t know how to reach them.
| Top 5 reasons why Brits would not consider a credit union | % of Brits* |
|---|---|
| 1. I am not familiar with borrowing from credit unions | 55% |
| 2. I don’t know how they work | 34% |
| 3. I don’t know how to reach them / where they are | 19% |
| 4. They seem too complicated | 5% |
| 5. I don’t think they are in a position to help | 4% |
James Benamor, founder of Amigo Loans commented:
The only way consumers will make wiser choices is if they know about those choices and can compare products easily. We’ve long been pushing for an independent price comparison site and we are encouraged the Competition and Markets Authority also now share this view. Customers are choosing the wrong products because they don’t know what else is available to them.
Credit unions are a much safer and secure way to borrow than payday lenders, while our old fashioned loans, which offer a similar APR to what credit unions can now charge, are a good alternative for those looking for more flexibility or for those who don’t want the hassle of joining a credit union.
