Current accounts became available from credit unions this weekend as part of new government plans to promote financial inclusion, the Association of British Credit Unions Limited (ABCUL) has announced.
Credit unions are thought to be a way of reaching Britain's financially excluded communities, offering a cheaper and often more accessible alternative to mainstream lenders or high street banks.
"People on low incomes often struggle to find affordable credit… Credit unions give them an affordable, safe and dependable alternative," Teresa Perchard of Citizens Advice commented.
The financial cooperatives will now offer current accounts to lower-income customers with account features including debit cards, direct debit and standing orders, although a cheque payment facility will not be available.
Meanwhile, ABCUL is working with consumer charity Citizens Advice to identify the advantages of financial inclusion for both lenders and borrowers, looking at ways to maximise the role of credit unions for customers excluded by mainstream high street banks.
The initiative, which will aim to ensure that credit unions operate in a responsible way in the aftermath of last year's Farepak scandal, has attracted funding from Barclays and the Abbey Charitable Trust.To learn more about current accounts, click here.
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