Credit unions: as benefit changes start to bite, is this their moment to come into the mainstream?

Britain has around 400 credit unions, ranging in size from very small community co-operatives to sophisticated financial organisations with assets of more than £100million. They are not-for-profit and focus on providing simple, low-cost financial services. And at a time when interest rates for short-term loans can be into four figures, credit union loans are currently set at a maximum APR of 26.8 per cent.

So why aren’t they are force to be reckoned with? 

Britain has around 400 credit unions, ranging in size from very small community co-operatives to sophisticated financial organisations with assets of more than £100million. They are not-for-profit and focus on providing simple, low-cost financial services. And at a time when interest rates for short-term loans can be into four figures, credit union loans are currently set at a maximum APR of 26.8 per cent.

So why aren’t they are force to be reckoned with? 

In Australia, for example, a quarter of the population is a member of a credit union.  In the US, credit unions say they have upwards of 95 million members.  In Britain they are regulated by the Financial Conduct Authority, which means members' savings are protected up to £85,000 in exactly the same way as they would be in banks or building societies

Funding, inevitably, has always been a problem.  Most are dependent on volunteers, and many were set up with support from sympathetic local authorities – and that financial support is increasingly hard to come by.

But changes in the law have offered new opportunities to credit unions, which some believe will help them become more mainstream.

For more on this story, go to http://socialenterprise.guardian.co.uk/social-enterprise-network/2013/apr/04/credit-unions-high-street-lenders

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