Credit Unions Explained

Credit Unions are not banks but are run for the benefit of their members only. In the case of HI-Scot, that's the people of the Highlands and Islands of Scotland, and anyone who lives or works in the area can join.

Often seen as a more ethical alternative to banks and other financial institutions, Credit Unions typically serve a wide range of members and provide a safe place for their savings, plus the facility to take out a loan at a competitive rate of interest.

Savings are pooled together to be used as a common fund from which members can apply for loans. Credit Unions encourage people to save, and members have financial security through low cost loans.

Yes they are, and Credit Unions undergo all the same checks as any other financial institution. They are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Credit Unions are also covered by the Financial Services Compensation Scheme.

The modern Credit Union movement traces its origins to Germany and to Friedrich Willhelm Raiffeisen, the Mayor of a small town in southern Germany, who in 1849 formed societies, which later evolved in to Credit Unions. The purpose of these Credit Unions was to enable people to help themselves in relieving debt and poverty.

Credit Unions in the UK were in existence for some time before the movement gained momentum in 1979, when the Credit Unions Act was passed.

Since then, the Credit Union philosophy of mutual self-help has proved very popular, and there are now over 600 Credit Unions affiliated to the Association of British Credit Unions (ABCUL) throughout England, Scotland and Wales.

The mission of the Credit Union is to promote the financial well-being of its members. To achieve this purpose the Credit Union is committed to providing a broad range of innovative financial products supported by the excellent service of a dedicated, well-trained staff. These programs will be administered in accordance with sound management practices to maintain the financial strength of the Credit Union. The Board of Directors, Management and Staff of the Credit Union hereby affirm that the efforts of the Credit Union will be consistently and professionally dedicated to the accomplishment of this mission.

Credit Unions aim to help you take control of your money by encouraging you to save what you can, and borrow only what you can afford to repay.