LONDON–Membership in the United Kingdom’s credit unions continues to rise “amid a growing hunt for affordable credit products as the cost of borrowing rises sharply and the cost-of-living crisis worsens,” according to a new report.
The latest data from the Bank of England for the first quarter of 2022 finds that 1.93 million people in the U.K. are now members of a credit union, an increase of more than 22,000 compared to the same period last year, according to CreditStrategy.com.
In conjunction with the growing membership, credit unions in the U.K. are also loaning record sums to members with total borrowing surpassing £1.79 billion in Q1 2022, the new data reveal.
“It marks an increase of £197 million (12%) since the opening quarter of 2021,” CreditStrategy.com reported.
“Credit union lending in England has been the major driver of this surge in total UK borrowing, with loans to members rising by £125 million (19% growth) between Q1 2021 (£661 million) and Q1 2022 (£786 million).”
Below 42.6% Cap
The report noted England’s CUs also offer more favorable rates on small, short-term loans than do many other lenders in the country, where the government has set the APR cap at 42.6%.
In March, the Centre for Social Justice released a report titled “Swimming with Sharks” that revealed 1.08 million people are victims of loan sharks annually in England, with the Centre calling for reform to the Credit Union Act 1979, including the creation of a new Credit Union Mergers Fund, according to the report.
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