Derbyshire Community Bank

 

A community bank which offers a more ethical way of lending and saving to local people has expanded into the Dales.

Derbyshire Community Bank based in Derby City was formerly known as Erewash Credit Union and was based in Ilkeston, where it still has a branch. It has now changed its name to reflect the fact that it now covers the whole of Derbyshire.

We have also re-branded from a credit union to a community bank to make it easier for people to understand what we do. Perceptions of what a credit union does, range from its a trade union to pawn broker so you can understand the dilemma.

Credit unions, which have been around in Britain for more than 50 years and differ from the pay day lenders and banks in a number of ways.  They are run on a not-for-profit basis and aim to help people control their money – encouraging them to save what they can and only borrow what they can afford to repay.  In the case of Derbyshire Community Bank, which was founded in 2006, it is only available exclusively for people living or working in Derbyshire.

The bank already has more than 3,500 members and around £1.2 million in savings and £1.4m in loans.  Certain levels of service Credit Union’s offer local people is not available at traditional high street financial institutions.

Whilst credit unions are popular in countries such as Ireland, the US and Canada, in the UK they are relatively unknown.  For those that do know about credit unions they think that they are a poor man’s bank or a lender of last resort. They don’t actually consider them as a lender of choice. But they can actually be competitive with their lending across all of the loan ranges.

We’re particularly competitive in the small loan area, especially in relation to our competitors such as the pay day and door step lenders. While there has been some tightening of regulation for the high interest lenders/payday lenders they still have interest rates, or APRs, of up to and over 1,000%.

Many of our savers do so for ethical reasons, supporting the local community by ensuring there is an alternative for borrowers who would otherwise go to high interest, payday or loan shark lenders. Others do it because we are a not for profit, financial co-operative with no big shareholders or bankers bonuses and any profits are shared with our members as a dividend and used to improve services.

We recognise there may be people who think that in a seemingly affluent area like the Dales there wouldn’t be a need for a Credit Union, however property costs and a lack of jobs in the area will create pockets of deprivation and lead to the use of these other unsavoury types of borrowing.  However, we require savers just as much a borrowers.

We have recently appointed a Community Development Officer, Samantha Taylor, who is based in the Dales. She will be holding Loan Surgeries at the Community Centre on Hurst Farm every Tuesday morning from 10am to 12pm and is regularly in the Matlock Job Centre. Please call in to see her to get an application form or find out more information.