‘Barefoot banking’ to support people on the edge


This is a piece I wrote for the local credit union in my part of Powys, following on from the Archbishop of Canterbury’s vow that the Church of England would fight payday lenders. Quite right – usury is an evil that religious organisations traditionally oppose. I’m publishing it here because the main information is relevant nationwide (and also because today appears to be quite slow for political news).

Credit unions must rise to the challenge created by the Archbishop of Canterbury’s stand against payday lenders, according to a leading figure in a Mid Wales organisation.

Richard Bramhall of Red Kite Credit Union said the main issue facing credit unions was how to bring affordable credit to “people on the edge”.

Last month, the Most Reverend Justin Welby announced that he planned to help community-based credit unions by allowing them to use Church of England premises as bases, to put firms like Wonga.com, which charge huge amounts of interest for their loans, out of business.

“His idea is very constructive,” said Mr Bramhall.

“Instant credit is a difficult sector to service because of high rates of defaulting. Payday lenders, door-step lenders and loan sharks – and to a lesser extent banks and credit card companies – answer the threat of bad debt by charging monstrous interest rates.

The Credit Union approach is responsible lending, careful interviews, getting guarantors where possible and working with the member to develop financial competence.

“The ethos always was to save; build a relationship with the credit union through saving – becoming a shareholder – and borrowing using the shareholding as security. They pay low interest and benefit by keeping and growing their shares.

“We do not want to lend at high rates,” he said. “Our standard rate is 12.68 per cent, or one per cent per month. If you borrowed £100 over a year and paid it back without interruptions, it would cost you £6.60 in interest, with no extra charges and no penalty for early repayment.”

But he warned: “The population density here is so low and the conceivable number of members so small that, even if everyone joined, our income from loan interest would not be enough to pay for bank-type premises or employees.”

The Credit Union’s solution is what Mr Bramhall calls ‘barefoot banking’. He said “The Herb Garden Café, in Llandrindod Wells, is an example. You can access credit union services six days a week, 12 hours a day – not just when we’re open but any time we’re in the building. People can pick up leaflets, ask about the credit union, leave messages, make payments and collect cheques. It costs the café nothing.

“If people want to help, they could develop the sort of access point we have here. Our greatest need is for self-motivating volunteers and casual drop-in service points in shops, churches, cafes and even private homes all over Radnorshire and north Brecknock.”

He added that credit unions also needed to establish themselves in schools, teaching responsible money management to youngsters.


  1. […] This is a piece I wrote for the local credit union in my part of Powys, following on from the Archbishop of Canterbury's vow that the Church of England would fight payday lenders. Quite right – usu…  […]

  2. liz727 August 18, 2013 at 1:56 pm - Reply

    Great post, Mike. We have had a credit union where I live since the early ’60s, originally set up by the local Catholic priest. It has always been an invaluable resource for our people in tough times.

    The British government should have spent the billions they did propping up the Big Banks after the 2008 collapse setting up a “People’s Bank” based on the principles of the credit union. Not only would it have helped the people, it would have made money for the country, not the bankers.

  3. lurpack1 August 18, 2013 at 2:57 pm - Reply

    Reblogged this on SyesWorldView and commented:
    Britain is a broken country on the verge of a moral and financial bankruptcy. The alleged political leadership are nothing more than front of house managers for the corporates and elites, evidently seen in this articles infographic.

  4. Stephen Bunting August 18, 2013 at 3:12 pm - Reply

    Plenty of people “living on the edge” across the country ….but I DO see signs of a response …

  5. guy fawkes August 18, 2013 at 4:34 pm - Reply

    Perhaps the church of England and other religions could put up collateral as well as loaning out premises to credit unions, which in my opinion have been no better than the banks because they want assurances of repayment from those with secure employment, not those who are really on the breadline.

  6. Fiona August 18, 2013 at 4:50 pm - Reply

    Also let us not forget that the Church has shares in Wonga!!!!

    • Mike Sivier August 18, 2013 at 4:55 pm - Reply

      Much to the Archbishop’s embarrassment. That doesn’t change what he’s trying to do, of course, so what exactly is your point?

  7. guy fawkes August 18, 2013 at 6:16 pm - Reply

    Mike if you were referring that question about the archbishop to me, I think the point is loaning out your premises which is probably paid for by either state or charity givers is not exactly benevolent, but funding those really in need and fighting against benefit cuts and bedroom tax would be more helpful than aiding another discriminatory banking system.

  8. paul August 19, 2013 at 5:48 pm - Reply

    If I were a legislator I would make sure that the culprits hanged slowly and painfully. I really believe that it will happen in the next few decades. The pound of flesh won’t be metaphorical.

  9. David Clark August 20, 2013 at 12:59 pm - Reply

    Who do people think borrowed the money? The same people who are moaning they cant pay. Did they really need another holiday? Did they really need a bigger plasma TV?
    The ‘poor and oppressed’ that rioted last year didnt loot Aldi or Sainsburys to feed their starving families. They were more interested in upgrading their TVs and music systems, or kitting themselves out in latest sports gear. These are the very same people which will borrow from Credit Unions and then put the debt into a Debt Management firm or an IVA.
    Like benefits, the wrong people will get help while those that are in genuine need will suffer.

    • Mike Sivier August 20, 2013 at 1:18 pm - Reply

      You’re asking the wrong questions. Did they really need to buy food that week? Yes they probably did – there are food banks now but those haven’t always been around, before you suggest that. Did they really need to pay the rent? Yes they really did. The riots of 2011 – not last year – weren’t about the poverty oppression that the Coalition has pushed onto us. They were initially a public reaction against alleged wrongdoing by a police officer, and then the criminal element got onto the bandwagon. Do not conflate the two.
      If you’ve read the article, you’ll see that credit unions have stringent systems in place to protect their cash. Your fears are largely misplaced.

  10. Vincent Thomas August 25, 2013 at 12:09 pm - Reply

    The concept of “barefoot banking” perpetuates the misconception that credit unions are “poor peoples’ banks” when what we really need is “community banks”. Yes, the poorest people will suffer the most at the hands of predatory lenders but the whole community benefits from fair, ethical, safe and affordable financial services.

    More importantly, credit unions that don’t serve the whole community will never make the kind of impact that’s needed.

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