Banking Without A Face

Cash in the Community

The faceless state of banking is taken for granted in our modern world. Cards are swiped, buttons pushed, funds transferred, WAP messages sent, web sites clicked. Remember the last time you spoke to a bank cashier?

Just as we are detached from our banks, we are also detached from the money itself - our hard earned sterling becoming a few digits in a number as long as your arm. Our cash travels overseas, and back, at the speed of a mouse click - funding repression here, government aid there, a loan to a business, the sponsorship of an event.

Credit Unions turn the anonymity of saving and lending on its head. The first Credit Unions began to spring up during the 18th century when communities saw dealing in money and goods locally as a means of social interaction and support. Today, the 600 or so UK based Credit Unions are popular, strong and present a real social alternative to the beeps and clicks of the High Street

What is a Credit Union?

Simply put, a Credit Union is a very localised savings and loans co-operative, set up by and run by its members. The emphasis is on social and sensitive democracy rather than the despotic, irresponsible unaccountability of the High Street. Members save small amounts together to create a pool of money that can be loaned to other members at a super low rate of interest. The repaid money, with interest, adds to the size of the pool, along with some small-scale investment or fund-raising. Anything left over at the end of the year can be paid back to members as a dividend.

Why a Credit Union?

Credit Unions are set up to provide a democratic, inclusive alternative to banking. They must be set up around a community a common bond, which could be a residential area, a common trade or shared interest or religious belief. The common bond helps to build trust and co-operating among members, as well as keeping all the money close to the saving community. It helps to foster a good community because loans are very low cost (less than 1% a month), and the emphasis is on co-operation, negotiation and money management, rather than curt, anonymous demands for repayment.

An ethical alternative to banking?

By its very nature, a Credit Union is a socially responsible way of saving and borrowing money. Many UK credit unions do use the Co-operative Bank to store the cash - benefiting from generous interest rates and no bank charges in the process - but it is the localised community aspect of the Credit Union which sets it apart from the world money-go-round. People are dealing with each other, rather than holes in the wall, or computer screens.

By keeping money within a community and recycling money amongst members, credit unions maintain an ethical stance, says Abbie Shelton of the Association of British Credit Unions.

Money stays local, instead of being invested in far off, often exploitative projects. Credit Unions also favour small-scale loans on a basis of need. Says Abbie Shelton: People who need money to pay a bill would take precedence over someone who wanted the money to buy a luxury item.

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