Logistics Guild Credit Union
-
Upload
skillsforlogistics -
Category
Economy & Finance
-
view
436 -
download
2
description
Transcript of Logistics Guild Credit Union
The Logistics Guild is developing a Credit
Union specifi cally for people who work in the
UK Logistics Sector.
Every Credit Union has a membership test
which determines who can become a member.
Being a part of the Logistics Guild, members
will have the right to join the Logistics Guild
Credit Union and take advantage of its ethical
product range including savings products, ISAs,
current accounts and loans.
Loans can be for personal training, learning
and career development and other purposes.
The money deposited by savers helps provide
fellow members with access to loans.
As a not-for-profi t fi nancial cooperative,
the income made from the interest charged
on these loans pays savers interest and
some surplus profi t may be used to fund
educational bursaries.
The Logistics Guild Credit Union is a not-for-profi t, fi nancial cooperative owned and run by its members.
Dr Ross MoloneyCEO Skills for Logistics
03
What is the Proposal?
You are being invited to become one of the key entities sponsoring the LGCU.
The Credit Union concept has the support of Skills for Logistics, the UK government and leading employers within the logistics industry.
Logistics employees can access
the Credit Union by being members
of the Logistics Guild. The Guild
offers training and development
programmes, member benefi ts (e.g.
discounts at retailers) as well as the
chance to join the Credit Union.
Guild membership is free.
The Logistics Guild Credit
Union’s (LGCU) lending rates are
lower because it is a not-for-profi t,
ethical lender which is owned
by its members (corporate
and individual).
The UK Government (Department
for Business, Innovation and
Skills through the UK Commission
for Employment and Skills) has
already committed £1.29m and major
logistics corporates are proposing
£600,000 of capital. The LGCU
will be regulated by the FCA/PRA
and retail deposits will be
protected by the FSCS scheme
up to £85,000.
Employees can borrow loans from the Credit Union at rates below those offered by banks, building societies and other doorstep lenders. Loans are unsecured.
logisticsguild.comFor more information visit
05
What social and educational problems is the proposal addressing?
Government research shows that
literacy and numeracy is low in
the sector.
The Government is keen to promote
Credit Unions as research shows too
many people on low incomes are
paying too much in bank charges.
Moreover, banks and building
societies have largely withdrawn
from personal lending leaving many
people dependent upon pay day
loan companies and doorstep
lenders who charge between 1,500
and 4,000% p.a.
Whilst loans may be used for any
purpose, the LGCU will be promoting
their use for training courses, helping
workers to improve their career
prospects, raise their self esteem and
take responsibility for improving their
career outlook.
What employer concerns does the LGCU address?
For employers, including LGCU loans in their training programme could:
• Increase the number of apprentices (18+ yrs) where there is low or no Government funding.
• Alleviate the pressure on training budgets and increase the scope of what can be offered.
• Increase productivity where research shows productivity gains outstrip wage increases.
• Improve staff retention. If staff leave the employer, they take the loan with them.
• Help improve job satisfaction, lowering rates of absenteeism and recruitment costs.
Increased training activity provides
more skilled workers for the future
and improves the reputation of
your company.
An employer may have a balance
sheet cap on what it can lend on
employee loans but the LGCU has no
cap on the number of loans lent.
Employers may want to expand
their social inclusion strategy to
help the long term unemployed and
address high youth unemployment.
Larger employers may wish to offer
development opportunities to their
subcontractors where individuals
in these companies could take out
training loans.
Logistics in the UK employs over 2 million people but many of these people are young and low paid.
0706
Why Credit Unions are fairer than Banks.
Products have no arrangement
fees or early settlement charges.
Life cover to repay loans is
offered at no extra cost.
CUs actively encourage saving
and offer information on how to
budget fi nances.
CUs are more reasonable in their
negotiations with individuals when
they get into arrears, looking to
help them resolve their fi nancial
diffi culties rather than seeing them
as a profi t opportunity.
What can loans be used for?
LGCU loans can be made for pre-employment training* or to apprentices or employees looking to upskill and develop their careers.
Loans can be made for specifi c
training in logistics or any work
related fi eld such as HR, accountancy,
fi nance, procurement, Health and
Safety etc.
Loans can also be offered for
everyday items such as buying a car
to get to work, washing machines,
school uniforms or family holidays.
Importantly, loans can be made
where there is no Government
funding and where banks are
reluctant to lend.
* As part of an approved scheme
Specifi c logistics qualifi cations such as:
• Pre-employment training.
• LGVs: Practical and theory tests.
• Logistics Certifi cates and Diplomas.
• 2nd degrees and MBAs in Logistics Supply Chain, International Trade and Transportation.
• Shipping Certifi cates and Diplomas.
• 2nd degrees in Maritime Business, Ship & Port Management & the Environment & Shipping Logistics.
• CIPS Procurement and Supply Chain Qualifi cations.
• Operations and Business Management.
• Humanitarian Logistics.
• The LGCU will work with a broad range of training providers and professional bodies.
The LGCU’s products are fairer to the employees than those of a bank or doorstep lender.
09
What is being asked of the Sponsors?
We are asking prospective Sponsors to provide one or more of the following:
Make a gift to help with the
LGCU’s capitalisation.
Provide subordinated debt or equity
where you would receive a market
return on your investment.
Provide senior loans or deposits
at competitive market rates to fund
the LGCU.
Permit access to their employees
and/or their subcontractors to
promote the LGCU and it’s benefi ts.
Allow payroll deduction for your
own employees who wish to take
out loans.
Why the Sector needs a Credit Union.
Market research* tells us:
60% of the workforce are under the
age of 34 and 57% do not own their
own homes.
65% of regular savers and 71% of
irregular savers would consider
opening a savings account with the
LGCU, subject to competitive rates.
30% of employees expect to take
out a loan in the next 12 months
for up to £2,000 with repayments
over 3 years.
* Survey by Logistiqa on 30 logistics companies.
Typically, the Sector operates on low margins. To develop and fully realise career potential, the LGCU can offer real benefi ts and opportunities.
logisticsguild.comFor more information visit
1110
Regulatory Disclaimer
The content of this presentation is
issued and approved by Promethion
Limited (“Promethion”) which
is authorised and regulated by
the Financial Conduct Authority
(the “FCA”) for the provision of
investment advice to persons who
can be categorised, in accordance
with the FCA’s rules, as “professional
clients” and “eligible counter
parties”. The Firm does not provide
investment services to retail clients
and such persons should not seek
to use or rely on any information
provided in this presentation.
The information contained herein
does not constitute an offer to sell or
the solicitation of any offer to buy or
sell securities and or any derivatives
and may not be reproduced, further
distributed or published by any
recipient without prior permission
from Promethion.
The information and opinions
contained in this presentation are for
background purposes only and do
not purport to be full or complete.
Nor does any content within this
presentation constitute investment
advice. No representation, warranty,
or undertaking, express or limited
is given as to the accuracy or
completeness of the information or
opinions contained in this document
by any of Promethion, its directors
or employees and no liability is
accepted by such persons for the
accuracy or completeness of any
information or opinions.
Promethion is not registered as an
investment advisor with the SEC
and therefore this document is
neither directed at nor intended for
US investors.
The UK government is sponsoring the initiative and each sponsor would be a partner with them in the project.
Founder Members
As a founding member of the
LGCU, a sponsor will enable its
own employees and those of its
subcontractors to borrow funds
for training (and other purposes).
A sponsor will demonstrate social
responsibility by supporting an
important new initiative which
helps protect lower paid logistics
workers from fi nancial exploitation
by high interest rate lenders and
improves access to education by
creating bursaries.
Governance of the highest standard
is ensured through professional
Credit Union staff, an industry board,
monthly reviews, reporting to SfL
and the UKCES plus supervision by
the regulatory authorities.
12
logisticsguild.comFor more information visit
What will the main outcome of the LGCU be?Like all Credit Unions it will be a not-for-profi t
fi nancial cooperative owned and controlled by
its members. We hope that people will be able
to use the Credit Union to take out small loans
to fund training, which will help further their
careers, as well as being able to take out loans
for household items.
What does this mean for businesses?So far some major logistics employers and
trade associations have pledged to support
the LGCU. Next we need to secure additional
funding. Employers are an integral part
of moving forward and a lasting solution.
Employers can also be represented on the
LGCU board which will protect the interests of
both employer and employee.
So who can use the LGCU?To use the LGCU you will have to be either
working or training within the Logistics Sector.
In addition to this you have to become a
member of the Logistics Guild. To register
for this is absolutely free. Being a member of
a Credit Union for your industry ensures that
your interests are specifi cally looked after. The
fi nancial support offered by the LGCU includes;
better rates for savings, loans and information
on fi nancial best practice, free life insurance on
loans, Christmas clubs and savings schemes.
How a Credit Union will benefi t Logistic Guild Members.
Zoe Shaw, Managing Director of Promethion Ltd, the company behind the new Logistics Guild Credit Union (LGCU) explains how the new Credit Union will benefi t Logistics Guild Members.
The philosophy behind this Credit Union is to help people.I hear that Credit Unions are “ethical
lenders”. What does this mean?
Credit Unions are controlled by law
with respect to how much interest
they can charge (a maximum
currently of 2% per month). They
often charge less than this and lend
at rates more competitive than credit
cards and much less than doorstep
lenders and payday loan companies.
As Credit Unions are not-for-profi t
organisations, any profi t made by
the Credit Union after expenses at
the end of their fi nancial year may
then be paid back to the members
in the form of an annual dividend on
their savings.
What is the philosophy of a Credit Union?Credit Unions believe in “people
helping people” and are often
run partly by volunteers. When
borrowers are unable to repay in a
timely manner they try to help
people to get out of their debts
rather than seeing people as a profi t
opportunity. However, they are
commercial and must make a profi t
and will not lend without making
credit checks.
Why save with the LGCU?Through convenient and simple
payroll deduction you can make
monthly or one off lump sum
deposits into savings accounts which
have competitive returns. These
accounts offer instant access and
online account management. Any
loan you take out will be protected
by ‘free’ life insurance so that if you
die the loan will be paid off in full
and not represent a problem for
your family.
Is my money protected in a Credit Union?Yes it 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. The LGCU will be regulated
by the Prudential Regulatory
Authority (“PRA”), subject to
Money Laundering Regulations and
registered under the Data Protection
Act to ensure members’ information
is kept confi dential.
What amounts can people borrow and on what terms?We will be offering loans for between
£1,500 and £5,000 for 3 years – there
is very little interest from clearers
to lend these smaller amounts. We
hope after a few months to offer
a payday loan product with very
competitive terms in comparison to
entities such as doorstep lenders for
amounts of £500.
What other products will the Credit Union offer?The LGCU’s core product range will
include regular savings products
(ordinary share accounts and ISASs)
and unsecured loans. Other lending
products may subsequently be
developed as the membership grows,
including pre-paid debit cards.
We will also look to offer insurance
and vehicle fi nance in partnership
with major providers in due course
and offer a lottery to raise money to
train members.
Will there be a branch network?The services will be delivered
through a modern internet platform
with telephone and mobile banking
options. It is believed this is
appropriate for a younger client-
base which may be on the move and
does not want an infl exible branch-
based structure. Given the projected
geographical spread of members
across the UK, this is the most
practical arrangement.
How will you actually market to our staff?We will work with HR teams to
design the best approach which
suites their organisation. This
could include articles in in-house
magazines, email contact, banners on
payrolls advertising the LGCU’s loans
and trade and internet advertising.
In the longer term a designated in
house contact person could act
as a focal point for members on a
volunteer basis.
Why have I not heard much about Credit Unions before?The UK is an under developed market
for Credit Unions. By comparison,
in North America 45% of the US
and Canadian population bank with
Credit Unions, 65% in Northern
and Southern Ireland and 40% in
Poland. The UK Government is keen
to encourage the growth of Credit
Unions in the UK and is working
with the trade body, ABCUL, to
promote saving and lending through
Credit Unions.
14