In response to strong interest in the potential establishment of a new credit union for rural Scotland, SAOS, with partners Aberdeen University, and support from NFU Scotland and RHASS, has launched a survey to investigate the possibility of a new savings and loans mutual, and is asking rural residents and businesses throughout Scotland to join the survey and add their views.
SAOS Chief Executive, James Graham, says: “In light of the credit squeeze of recent years and changes to rural banking services, we want to answer the question: ‘Could the people and businesses of rural Scotland better manage some of our financial resources ourselves?’ If you live in rural Scotland, join our survey and add your views.”
Credit unions are a form of savings and loans mutual, owned and governed by their members to serve their needs. They only transact business with members, have restricted borrowing powers, and cannot speculate with members’ funds. Like banks, they are regulated by the Financial Conduct Authority and the Prudential Regulation Authority, and deposits are covered under the terms of the Government’s Financial Services Compensation Scheme. James continues: “The kind of credit union we envisage would have a more economically varied membership than is typical, reflecting the diversity found in rural Scotland. Its aim would be to serve the entire rural community of Scotland, ensuring that members’ money is used to support rural needs.”
Preety Karal, KTP Associate, is managing the survey, she maintains: “A credit union in Scotland would help to ensure that money remains in the rural economy and flows between generations and within local communities. It would serve its members better than national banks because its purpose, policies and decision making would lie with its members in rural Scotland. It’s a form of self-help and community responsibility.”
The survey is being carried out by a Knowledge Transfer Partnership (KTP) of the Scottish Agricultural Organisation Society (SAOS) and Aberdeen University, with funding provided by SAOS and a KTP grant from the UK’s Technology Strategy Board and the Scottish Funding Council.
The survey takes place against the backdrop of The Scottish Government and the UK Government promoting increased diversity in the banking sector to counter high levels of market concentration. Entry requirements for establishing new banks have been reviewed, and the criteria governing credit unions relaxed to enable them to grow and broaden their membership. It is these changes that create the opportunity to consider an alternative to the ‘big banks’.
Everyone completing the survey will be entered into a prize draw. First prize is two nights at Crieff Hydro with dinner, bed and breakfast for two, and there are four runner up prizes of £100.
The survey results will be available in November.