Barclays to allow credit unions to operate in its branches
Barclays has set up a £1 million fund for the benefit of credit unions, and will allow them access to its branches and payments infrastructure.
Barclays has announced that it will allocate space within branches for credit unions to operate, as well as offering them use of its mobile phone payments service Pingit, which allows people to send money to each other with just a phone number.
This will all come without charge for credit unions, despite the fact that some are now competing with banks for custom. A £1 million fund has been set up by the bank for credit unions to use, in order to help them expand and modernise
What do credit unions do?
Credit unions are not-for-profit organisations that are set up to help communities of people who share a ‘common bond’. For example they may share an occupation, live in a specific geographical area or hold other shared interests.
They help people who ordinarily struggle to access finance to take out loans, while some can now offer services like current accounts, insurance and mortgages.
Credit unions can also be a good alternative to payday loans and credit cards for small sums of money, often charging much lower interest rates on amounts which would be too small for a personal loan agreement. Read credit unions explained for more information.
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Why would Barclays do this?
The move to offer credit unions this opportunity, particularly at a time when they are competing with banks by expanding into the aforementioned financial products, does seem slightly strange.
However, the Chief Executive of Barclay’s retail and business banking arm, Ashok Vaswani, says that the bank wants to ensure that “no-one is left behind” and that its commitment “will help people who have been historically neglected by the sector, to put them on a more secure footing and give them the chance to fully participate in our economy again”.
The £1 million fund will, over four years, be used by credit unions to grow and expand, allowing them to serve more people in their communities. Mark Lyonette, Chief Executive of the Association of British Credit Unions Ltd (ABCUL) says that “member credit unions have benefitted greatly from Barclays support,” and that he looks forward to continuing to work with the bank to “assist credit unions to provide responsible and attractive financial services to many more people”.
Aside from the cash injection, Barclays will also support credit unions by sharing knowledge, helping to increase the skills of people working in the sector.
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What do you think of Barclays move to support credit unions? Let us know your thoughts in the comments box below.
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