Croydon Council is backing the re-launch of Croydon Plus, the locally based credit union which could help keep hundreds of residents out of the grasp of rapacious payday loan companies, which trade on desperate people borrowing money at sky-high interest rates.
Croydon Plus promises competitive (that means “low”) interest rates on loans and a range of other banking services. They don’t have “customers”, but members, and the credit union operates as a co-operative, more like old-style mutuals and building societies.
A credit union is based on local people helping each other. One person’s savings is loaned to another member. The interest the borrower pays goes back into the credit union for the benefit of the members.
There are no external shareholders. Only members can be board directors. But to operate successfully, Croydon Plus needs some funding to be able to make loans to new members, and Croydon’s Labour council is making a loan to the credit union of £100,000.
The relaunch this month (with a bizarre logo of multi-coloured haemoglobin which looks as if it has been lifted from a 1980s Boot’s own brand product; perhaps we should be reassured that they’re not frittering away cash on graphic design), sees the introduction of online banking and a new product, the Jam Jar Account. When a member opens their Jam Jar Account, they will agree to have any benefits they may be receiving paid straight into the account, which will then manage the funds, settle household bills, pay off debts and put aside a small percentage as savings.
Operating as a community bank that is owned by its membership, Croydon Plus will be regulated by the Financial Conduct Authority and overseen by an unpaid board chaired by Wimbledon clergyman Andrew Wakefield and including Croydon councillors and senior council officers.
Established in 1999 – as Croydon, Merton and Sutton Credit Union – it is part of a movement that has been in existence for more than 150 years.
With increasing numbers of “working poor”, and the growth of “easy” access to high interest rate credit – with some high street firms charging 5,000 per cent per year interest on payday loans – the need for a more benign, less profit-driven organisation to offer finance is growing by the day.
Mark Watson, the council cabinet member for communities, said: “We want to help as many members of the borough’s communities as we can, particularly at a time that’s seeing the introduction of universal credit, which will impact on many of our residents.
Give him some credit: Andrew Wakefield
“We see Croydon Plus as a positive way of encouraging people to save a little – whether it’s for a rainy day or a special occasion – and also to offer them financial support when they need it, at a fair interest rate and without the stresses and intimidation that can come with other, less reputable, loan providers.
“I’d urge everybody to open a Croydon Plus account. Their money enjoys the protection of the Financial Conduct Authority, so it’s quite safe; they’ll pay a fair level of interest on any loan they take out; and they’ll also be offering a helping hand to other members of their community. Everybody wins.”
Rev Wakefield, who has been the vicar of St Andrew’s Wimbledon for 25 years, said: “We on the board of Croydon Plus see the involvement of the council as a major step forward in growing our services and our membership.
“As with all credit unions, Croydon Plus exists to offer safe, cost-effective finance options for those in the community who, for whatever reason, don’t want, or aren’t able, to use the high street institutions.”
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