John Lewis Partnership PLC 7. And it is easier to obtain a loan from a credit union than from a bank. Those with the lowest incomes usually have to pay the highest interest charges. So credit unions are a lifeline for those in need, for those who often need to borrow small amounts to keep going till their next payment arrives. A source of funds in an emergency for the needy borrower, credit unions also offer a cheap form of borrowing, say for paying for a holiday or for buying a car.
Credit unions are financial co-operatives, are in effect community banks.
The owners of a credit union are its individual members and it is run for the benefit of its members. Its members pool their savings to provide loans at favourable rates of interest. Credit unions are started, and mainly run, by volunteers, at least while still small. Many credit unions are small, based on neighbourhood or local church community, but some are very big. Each member has one vote regardless of the amount of his savings or the size of his loans.