Barclays Bank is spending an initial £700,000 ($998,000) to improve the financial stability and growth prospects of UK credit unions.
The bank is sponsoring the Association of British Credit Unions to help improve credit management techniques among the association’s 492 affiliates, which have 295,000 members and assets of £221m.
From July the member-controlled financial co-operatives will be subject to a new regulatory regime which among other things is expected to allow those using them access to compensation.
Barclay’s support will enable credit unions to assess their financial stability using a software tool known as Pearls, which is currently used by credit unions in 17 countries to identify any weaknesses in their financial controls. Pearls generates financial ratios in six areas including asset quality, liquidity and provision for bad loans.
Barclays’ involvement will enable 10 credit unions to pilot the software and Abcul to provide all credit unions with Pearls ratios, which will highlight areas for improvement.