Credit Union borrowing in 2022 exceeds record £2 billion 

The analysis of the Bank of England shows that total borrowing from Credit Unions saw huge growth through 2022 as consumers tackled the cost-of-living squeeze. Total loans exceeded £2.0 billion for the first time by the end of the year, an annual increase of £261 million or 15%, over the course of 2022.

Credit Union membership also swelled, rising by 60,863 to reach 1,980,964 at the end of 2022 as more borrowers widened their net in the search for affordable credit solutions.

The Freedom Finance Credit Monitor revealed that average household quoted rates on credit cards rose to their highest levels since 1998 last year reaching 22.48% at the end of December.

Personal loan rates also saw their highest quarterly increase of all time in Q4 2022 although rate increases among both products have since stabilised and nudged down.

Credit Unions are cooperative societies owned by their members joined by a common bond such as living or working in the same area. They offer a range of financial services products including loans which are often available at low rates and to people on lower incomes and so can be a vital financial solution for those who are under-served by the mainstream lending sector.

Emma Steeley, CEO at Freedom Finance, commented: “Credit Unions are a financial lifeboat for many borrowers and they play a vitally important role within the consumer credit sector.

“We will always support institutions that aim to increase and diversify the range of products available on the market, particularly those that are targeted at borrowers who may otherwise struggle to access affordable credit.

“We know the dangers that consumer credit exclusion poses to society through our work on loan sharks with the CSJ which suggested over a million people could be victims of illegal lending.”