by James Johnson

Last updated at 13:21, Monday, 15 August 2011

Most people don’t look forward to Christmas shopping but Mandy Johnston, development worker at the Carlisle and District Credit Union, is more apprehensive than most.

The credit union is a not-for-profit organisation, run by a volunteer board of directors, which operates under the ethos of honesty, openness and social responsibility.

Mandy has been working at the credit union for six years, and if there’s one thing she’s learned about the business it’s that people will leave things to the last minute.

She explains: “We are getting busier with people from all walks of life, and this Christmas is going to be mad.

“Holidays and Christmas are the times people want to borrow.

“People should start thinking about it now, but a lot won’t start until September when their kids go back to school.”

However, for many people in Carlisle, Christmas is the least of their concerns.

Membership at the credit union is increasing at an average of 40 to 45 people a month and this is down to the uncertainty surrounding people’s futures, says Mrs Johnston.

She explains: “People are putting money away because they are frightened for their jobs and they need access to some kind of funds.

“We can help people with money for car repairs, weddings, and they can borrow as little or as much as they need.

“You are more in control of your money, you get an incentive to save and you think about it more.”

Mrs Johnston explains that although credit unions are not suitable for everyone, the perks are numerous.

She says: “If people have masses of debt we can’t help them, because you have to save to borrow.

“Sometimes people come in and we can’t do anything for them, but if we can help we will.

“Credit unions treat people as an individual. We are local and run ethically, and people are not just seen as a statistic.

“We can lend up to £8,000, and offer a form of life cover for families.

“We are not-for-profit and our ethos is to save.

“We can keep people going over the short term and give them advice. If we can’t help them then we will refer people to the Citizen’s Advice Bureau or the law centre.

“They also benefit people locally – if people get their spending money from our credit union, they’re more likely to spend it here than anywhere else and that benefits the local economy.

“It’s cheap as chips and a fabulous idea.”

Why then do the majority of people not have credit union accounts? Mrs Johnston believes the reason is complex, but largely down to a mistaken perception of what they do.

She explains: “I think a lot of people don’t realise what credit unions really do – they’re the best-kept secret.

“People have a certain idea about them - they think it’s just cash.

“They think they’re just for a certain kind of person but in other countries they are huge.

“The more people that come in, the more benefits we can offer.

“People can come in to get a cheque and cash it within a day.”

One of the problems that faces people with money problems, particularly in the current bleak financial climate, is the temptation of falling prey to loan sharks or cold callers.

Last week, the News & Star reported on the case of Florence Armstrong, a 74-year-old Maryport woman who was conned out of nearly £5,000.

Fraudsters pretended that they were from a pay protection company and told Mrs Armstrong that she was entitled to £12,000. Once they had gained access to her details they used them to steal her money.

Mrs Johnston explains that people get involved in these scams because of an increasing feeling of helplessness.

She says: “A lot of people are frightened about their jobs and feel they don’t have anywhere to turn.People go to loan sharks because they are desperate and don’t look at the long term. A lot of internet sites now are just an escalation of this problem. People are starting to think about an alternative though.”

Although the union currently boasts more than 1,500 members, there are plans to increase the number of people opening accounts by improving services.

The credit union is currently working in association with Co-op Electrical Goods to offer customers a safer way of buying electrical products.

The union is working on being self-sustainable by this time next year, and is considering opening for longer hours in the run-up to Christmas.

A problem Mrs Johnston has identified is that making credit unions available for internet users has inherent difficulties.

She said: “At the moment we operate face-to-face, because there can be problems with identification.

“On a computer it’s difficult to prove someone is who they say they are.”

Plans are also underway to increase services to students and build better relationships with local businesses.

One man who is trying to better publicise credit unions in the area is Mark Studholme, a regional development worker at Northern Money, a service which aims to promote credit unions in the north of England.

Credit unions in the north east of England started working on Northern Money in 2009 and in January 2011 the organisation was extended to cover Cumbria.

Northern England won a 2011 Nominet award on July 28 in the ‘nurturing powerful local partnerships’ category.

The Nominet internet awards aim to recognise achievements of organisations and individuals that help to make the internet a more inclusive, safer space for everyone.

Mr Studholme agrees with Mr Johnston that credit unions have a low profile, but that Northern Money are doing what they can to help them out.

He says: “Although credit unions are becoming more recognised, they don’t always have the resources to advertise themselves the way they could.

“The idea is that we advertise the concept of credit unions.

“We help them with encouraging new members and setting up savings accounts.

“We are also here to help develop new schemes that credit unions can use.

“That can be done by us working with social landlords, producing leaflets, and creating a template to make credit unions more competitive with other money lenders.”

Mr Studholme acknowledges that people will always need to lend money at some point.

He explains: “It’s inevitable that sometimes people will need an amount of money and that’s when loans sharks get them – they have no conscience.

“We want to put forward the credit union as an alternative because they are far cheaper.”

Northern Money is working on a number of solutions that will help people avoid the clutches of unscrupulous lenders.

One of the key ideas fits in with a problem Mrs Johnston identifies, and that is an online system that would be able to identify users and offer instant loans.

Despite the challenges facing them, Mr Studholme is confident in their chances of success.

He says: “I’m very optimistic. By providing the services to people we can sign up new credit union members, make them more competitive, and provide incentives for new members.

“Word of mouth helps a lot – friends, family and things like that.

“I want to try and encourage people to see the benefits.”

First published at 11:27, Monday, 15 August 2011
Published by http://www.newsandstar.co.uk