Credit Union
A small-scale fund set up by people with a common bond of some kind, such as living in the same area, or working in a firm that can make a useful contribution to local needs and employment, but could not compete if it were fully exposed to the market economy.
Members of the union have to purchase some minimum number of shares, which may be as little as £1’s worth, up to a usual maximum of around £5,000, for which they receive interest in the form of dividends. The union then lends money to local people and small enterprises, and this money is therefore kept working within the area, instead of draining away into areas with stronger economies, or into the world market.
Credit unions’ aim is cooperative microcredit, rather than competitive pricing, so they can maintain a constant rate of interest, independently of how much mainstream rates may fluctuate. They can also provide banking facilities so that local people can pay in money, draw it out, and pay bills without having to travel into the town centre, which is necessary in poorer parts of town where the commercial banks have no branches.C269
Related entries:
Vernacular, Casuistry, Socially Solvent, Social Mobility, Closed Access, Usury.
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