Rainbow Warrior - Credit where it is due
It’s good to see that the sterling efforts of Norfolk Credit Union are being celebrated – and publicised – in the Inside Out programme on BBC East next Monday, December 10.
This sort of exposure is long overdue given the huge numbers of people who are in thrall to high interest lenders of the Payday Loan, High St Money Lender or pure and simple lurking-at-the-end-of-your-street loan shark variety.
What do I mean by high interest? Well basically think of a number then stick several zeros on it. Rates of a few thousand percent are quite common. Once these people have their suckers attached they will bleed you of every penny you have over as long a period as they can.
Contrast this with the Credit Union. You will have a chat with a volunteer. In the case of readers of the Lynn News this will be with someone who is part of West Norfolk Community Bank which is the local branch of Norfolk CU. This could be in Downham or Lynn at a number of different venues on different days of the week.
The volunteer will listen to you to find out why you are applying for a loan – common reasons include household emergencies, consolidating credit card debt or escaping the clutches of a high interest lender.
They will run through a number of forms with you which help to assess your income and expenditure and then send everything off to HQ in Long Stratton. You will usually hear whether or not you have been successful in about a week’s time. The crucial difference between this process and the one you would follow with any other lender though is the rate of interest you will pay. It will vary between 1 and 2 per cent per month – or put another way just 26 per cent per annum and the period over which you repay the Credit Union is decided by you and your advisor to suit your ability to repay.
So let’s imagine you needed to borrow £600 and you had arranged to repay the loan, at two per cent, over two years. This would mean paying back £31.73 a month. The total cost would work out at £761-89.
With an eye to the future, Norfolk Credit Union will be running a new Budgeting Account Service for members, to help people cope with the change in the way benefits are paid, when they move from weekly to monthly lump sums. This will help make sure that important bills like rent or mortgage payments are allowed for. Credit Unions were originally set up to encourage people to save. That’s still an important part of the ethos. The main difference is that the money you put in is being used to help others who live in your county. And you get a small dividend.
On a recent trip to Southern Ireland, apart from enjoying lots of lovely Guinness and beautiful scenery, I was pleased to see a local Credit Union in every market town we visited.
They are clearly very much part of the fabric of life there. We have a lot of catching up to do.
If you are interested in being trained as a volunteer with West Norfolk Community Bank – or if you need their help – give them a call on 07905 721524. The head office number is 01508 533842 ... And try to catch the programme next Monday.
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Thursday 23 May 2013
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