Credit Union For Logistics
Skills for Logistics, together with industry partners, call upon the Logistics Sector to back The Logistics Guild Credit Union – an exciting initiative that will provide an ethical and cost efficient source of finance for the industry.
Skills for Logistics – with financial adviser Promethion and other industry partners – are sponsoring the opportunity to establish a credit union that will provide a cost efficient source of borrowing for the Logistics Sector. With support already in place from the government, The Freight Transport Association and leading companies in the industry, the entire Logistics Sector is being called upon to back the initiative.
The Logistics Guild Credit Union (LGCU) will have an ethical product range that will include saving products, current accounts and ISAs. It will also be offering the kind of small loans that gain little interest from high street banks and other lenders. Furthermore, it will be offering them at a competitive market rate. This is possible because the LGCU will be a not for profit financial cooperative: any surplus generated after expenses will be used for the benefit of members, including payment of a dividend on their savings and training bursaries to help the Sector.
To gain access to the LGCU requires membership of the free to join Logistics Guild. The Guild provides the necessary common bond required of a Credit Union. Members will then have access to loans for personal training, learning and career development as well as for general lifestyle purposes.
The LGCU is protected by the Financial Services Compensation Scheme, which provides 100% protection for up to £85,000 shares per individual member or junior’s savings just as with a UK bank or building society. It will be regulated by the Prudential Regulatory Authority (PRA), and will have a board comprising technical experts.
This initiative will support the Logistics Sector from the bottom to the top. For example, it can attract job seekers wishing to become an LGV driver who are not able to turn to a high street bank or to their parents to finance their LGV licence or Driver CPC. It can also support an owner operator or logistics manager who wants to study for an MBA.
The LGCU will allow employees to self-finance loans for training, which reduces the strain on training budgets. This will also help in reducing churn and staff turnover within the company. Employees will progress through the company to enjoy more skilled positions rather than finding a job elsewhere. Companies can get LGCU loans for investing in, for example, dual fuelling vehicles, telematics, fleet management, etc.
The UK Government Department of Business Innovation & Skills (BIS), through UKCES (UK Commission for Employment and Skills), has already committed £1.29 million to the LGCU and major logistics corporates have provided a large proportion of the required £600,000 of capital. The next step is to secure additional funding from employer sponsorship. The LGCU also needs cooperation from employers in other important areas: payroll deduction for employee loan repayments, which is an important risk mitigation step for a credit union; and marketing the benefits of the LGCU to the workforce. Employer sponsors can be represented on the LGCU board, which will protect the interests of both employer and employee.
Commenting on the LGCU, Dr Ross Moloney, CEO of Skills for Logistics, said: “Following the global financial crisis of 2008 there is an important role for credit unions to play in terms of giving individuals and businesses access to finance for whatever they need. The Logistics Guild Credit Union will play a significant part in providing finance that will attract people to our industry as well as help develop and support our existing colleagues.”
Zoe Shaw, Managing Director of Promethion said: “There is a clear need in the Logistics Sector for this exciting initiative. To take the LGCU forward, it is vital that the industry gets behind it and that we get employer engagement.”