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Tel: 020 7561 1786 (Multilingual advisors available)  •  Fax: 020 7272 8192  •  Email: info@credit-union.coop

Wed 16-Aug-2017
NewsCredit unions turn borrowers into savers
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7 March 2017
Credit unions turn borrowers into savers

A new report from the Fairbanking Foundation shows how credit unions turn borrowers into savers.

The report, Save As You Borrow – Credit Unions Creating Good Habits, used research carried out by Ipsos MORI for the Fairbanking Foundation into the behaviour of over 1,200 borrowers from seven different credit unions, including London Capital, who accessed a “Save As You Borrow” product – i.e. a loan where the borrower makes a small contribution to a savings account alongside their monthly or weekly loan repayment.

The research found that 67% of borrowers who had no savings and found it impossible to put money aside now plan on saving regularly as a result of using a Save As You Borrow product.

The positive long term impact of Save As You Borrow products is underlined by the fact that only 26% of respondents were saving regularly before taking out their credit union loan, but 71% said they would continue to save regularly throughout the year after paying back the loan. 97% of respondents stated that they found the approach from credit unions helpful in encouraging them to save.

Fairbanking Foundation Chief Executive Antony Elliott said: “We have proven that Save As You Borrow is highly effective in creating new savers and that it is so much more than just an abstract idea. Turning borrowers into savers is a concept that should be applied more widely among credit unions and beyond because the concept is a win-win for everybody – customers as well as the financial institutions that offer them.”

Martin Groombridge, Chief Executive of London Capital Credit Union, added: “We know from experience with our own Saver Loan just how valuable this sort of product is in helping people to start saving and continue saving after paying off their loan. However, it is good to see that the report backs up what we have seen and that this sort of product really does help to turn borrowers into savers.”

By putting aside a little every month, our Credit Union Saver Loan enables members to build up a nest egg of money while paying off their loan, which means they are less likely to have to rely on borrowing in future. Click here if you would like to find out more.


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