The Family Loan and Saving Scheme


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Swoboda is delighted to have supported David Harris and Tia Warbrick at Pennine Community Credit Union (PCCU), in Lancashire, GB, to co-author an in-depth study of one of British credit unions’ most popular products in recent years, the child-benefit-linked family loan.


For community credit unions in Great Britain in recent years, family loans – where Child Benefit is paid directly into the credit union by the Government for savings and loan repayment – have become a high growth product. This was discussed in a recent Financial Inclusion Centre / Swoboda publication on salary and benefit deduction-based lending. In this latest report, PCCU researches the views of its members who use this product, undertakes an extensive review of its own policies and practice, and talks to other credit unions about their experiences and perspectives, in order to understand whether this product is meeting needs in they way they intended.

The result is both a resounding endorsement by members of the PCCU product and service, affirming the credit union’s belief that this is a valuable service for their members, particularly those on low incomes, and meets borrowing and savings needs in a way that would not be possible without the dedicated Child Benefit payment mechanism. The report also provides a comprehensive discussion of best practice in this area: PCCU has found opportunities to strengthen its approach, and this document will be a very useful guide for other credit unions providing or seeking to offer this product.