Analysis from Broadstone finds that Credit Union lending has increased by 42% over just the past four years, in evidence of borrowers’ ability and willingness to shop around beyond major high street banks and lenders.
As of the end of 2023, Credit Unions have £2.3 billion in outstanding loans to members. This marks a 42% increase from the £1.6 billion lent at the end of 2019 and growth of over a fifth (21%) through 2023 alone, the largest year-on-year change on record.
The total number of Credit Union members also rose by 4.6% to 2.2 million through 2023 with income rising by over a quarter to record levels in 2023, reaching £324.3 million.
Despite the surge in lending from Credit Unions over the past four years, the proportion of net liabilities in loans in arrears has only ticked up modestly from 5.2% to 6.8%. It suggests that despite significantly increased hardship and broadening of the borrower base, Credit Unions have not unduly suffered from bad debt.
Tom Cuppello, Director, Risk, at Broadstone, commented: “The Bank of England data demonstrates the growing role that Credit Unions are playing in our financial ecosystem as the cost of borrowing has risen.
“For members who may feel locked out of the mainstream lending sector, especially as demand for credit has risen following the pandemic and with tightening of lending criteria, these Unions offer an attractive alternative.”
