logistics guild credit union

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Logistics Guild Credit Union

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We are developing a Credit Union for the Logistics Sector, which will provide a source of funding or a way of indirectly reducing the cost of training to businesses. Any financial surplus from the Logistics Credit Union will be channeled as bursaries for members to help pay for training. Importantly, in a sector with a larger proportion of people who struggle with reading and writing, money can be drawn by members to help improve basic skills. As the Credit Union develops momentum, we hope that it can offer financing to employer members for vehicle, plant and machinery leasing at preferential rates, all with the ethical lending ethos of a Credit Union.

TRANSCRIPT

Logistics GuildCredit 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

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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.

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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

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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.

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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.

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[email protected] Richard Bell

01908 313360logisticsguild.comFor more information visit