Credit unions plan for more members

Credit unions have been given more freedom in recent times to compete with banks

The UK's network of credit unions is set to expand after 31 groups signed up to a major investment project.

Credit unions, which are regulated, generally operate in local areas and pool savings, allowing them to offer small loans to members.

The government has invested £35.6m in an attempt to double membership to two million over the next five years.

The expansion project is aimed at encouraging people to use unions, rather than expensive payday lenders.

The Association of British Credit Unions (Abcul) is overseeing the expansion project. It has announced that 31 credit unions have signed up to the first wave of the scheme, with more expected to join them.

These credit unions aim to increase the number of financial services available, introducing more current accounts, budgeting accounts, and cash Individual Savings Accounts (Isas).

They also want to upgrade technology used by credit unions, to allow members to access services online.

"Credit unions will retain their local status and community focus, but work together where they can benefit from pooling knowledge and resources. This will give members the best of both worlds," said Mark Lyonette, chief executive of Abcul.