Essex Savers net Credit Union Limited
Essex Savers net Credit Union Limited is not a bank. It is not a building society. It is a modern type of financial institution designed to help ordinary people give each other financial support. It is entirely owned by its members and you must be a member to deposit money or ask for a loan. The loans we give are relatively small and for a short period.
On 1 April 2013 we had 3,093 members. The amount held on behalf of members was £625,855. £478,083 was on loan to a total of 575 members. From the time we were set up in all we had made 3,250 loans totalling £2,230,000.
Essex Savers is truly local. We have over 25 face-to-face access points running weekly across Essex. We are hoping eventually to have access points in every Essex library and to extend into rural areas.
In 2011-12 our costs were £200,000. They are expected to grow to approximately £300,00 in 2012-13 with the need to employ full-time staff centrally. Thereafter costs will grow incrementally as we work towards sustainability, with income covering all our costs, which we expect to achieve around 2017.
Benefits Essex Savers brings
- Economic justice
- Economic regeneration
- We offer ethical local banking:
- Secure savings - member accounts and Christmas, holiday and special savings
- Affordable credit - loans from £50 to £7,500
- Budget account to receive income, eg wages/salary (enables people to accept job offers), welfare benefits, savings for regular bills
- Prepaid debit card (shop, pay bills, cash at ATM) A prepaid debit card with a budget account functions as a simple current account
- Rent Direct Account to receive housing benefit to pay landlord
- Family Funeral Plan - affordable plan for the whole family
- Legislation in 2012 allows us to serve corporations as well as individuals and enables corporations to invest long term in Essex Savers
- Social cohesion
- Financial exclusion and over-indebtedness
Outcomes that reduce cost to society:
- Fewer arrears of priority debts, eg rent and council tax, = less debt recovery actions and lower court costs
- Fewer repossessions (helping people with rent payments) - a potential saving for Essex of over £5 million
- Less use of high-interest lenders such as:
- licensed doorstep lenders - 200% - 1,500% APR
- unlicensed doorstep lenders (loan sharks) - 8,000% - 15,000% APR
- money shops / pay day cash / cheque cashers / pawnbrokers Pay day lending is increasing - rates charged are 2,000% - 5,000% APR
- Better money management and more disposable income when using a credit union - access to money advice and education
- Fewer financial problems and money worries =
- Fewer health problems, particularly mental health issues which give a rise to an increase in GP and hospital visits
- Less relationship breakdown (increases call for welfare benefits and need for extra housing)
- Less absenteeism and job loss (increases call for welfare benefits)
Universal Credit is expected to be a high cost to local authorities and housing providers. We are able to assist those in receipt of universal credit with money management by allocating funds to "jam jar" accounts and loading the remainder to their debit card weekly or fortnightly.