Scottish credit unions can benefit from the crackdown on payday lenders and the growth in personal credit, a Glasgow conference will hear today.
Cuna Mutual, the world's second largest credit insurer, is staging the event at the Science Centre for 70 credit union leaders under the banner 'Going from Good to Great, in the city where one in four belongs to a credit union.
Paul Walsh, Cuna's chief executive, said Scottish unions had a better record than any in the UK of "activating" over-18s to become borrowing members of unions, which made good business sense. "It is not just a feelgood factor and socially good, it is financially good for the credit union. If a member joins a credit union in Glasgow between the ages of 18 and 25, they will borrow 17 more times from the union in their life."
Mr Walsh will tell the conference that it is Scots hit by an unexpected debt who are under the greatest pressure to seek alternative forms of finance. The mutual insurer's annual financial fragility survey found one person in three saying they would be unable to meet a sudden demand for £2000.
Cuna also notes "the rebranding of Wonga to avoid its association with astronomical repayment rates and the closure of an estimated 470 high street bank branches in 2014".
Mr Walsh said: "The credit market is up by 20 per cent in the last two years and credit unions particularly in Scotland are very well positioned." He said it was a "mistake to talk about payday lenders and credit unions in the same sentence" but as almost half of all personal loans in Scotland were used to repay other loans, credit unions could help borrowers get back on their feet.
He added: "The biggest trend is engagement from existing members, coming out of the inertia that existed in the downturn."
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