Banking experts at the University of Greenwich are helping London’s biggest community credit union to grow so that it can offer mortgages and long-term loans.
The London Mutual Credit Union needs to know how to undertake complex risk assessment, manage housing finance and comply with regulations, in order to win authorisation to make home loans. The university has formed a Knowledge Transfer Partnership (KTP) with the credit union to help it develop the required expertise.
Dr Sallyanne Decker, Principal Lecturer in Banking at the university’s Business School, says: “The London Mutual Credit Union has the potential to widen its range of ethical and reasonably-priced services, and to help more people buy their own homes. But first it has to transform its capability to meet higher regulations – that’s where we can help.”
Lakshman Chandrasekera, London Mutual’s CEO, says: “We already offer most things a normal bank would offer, but as a non-profit cooperative we can give choice to people on low incomes or benefits who may not get credit elsewhere. This partnership with the University of Greenwich will mean we can offer mortgages. One area where we can make a real difference is for those people with the ‘Right to Buy’ their council home.”
Mr Chandrasekera says the credit union is also attracting people on higher incomes – now 40 per cent of its customers. It operates in four London boroughs and counts MoneySavingExpert.com’s Martin Lewis and the Duchess of Cornwall amongst its members.
Dr Decker says: “With the demise of building societies and the ongoing problems faced by British banks, credit unions can fill gaps in the provision of financial services.”