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Shariah Compliant Credit Union Product Research
Presentation of Findings
Prepared for: DWP Financial Inclusions Champion Initiative (West of Scotland)
Date: June 2010
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Assenti Research commissioned to establish interest in a Shariah compliant credit union product among Glasgow’s Muslim population
Key research objectives to determine: Current usage and attitudes to financial products and services Knowledge and understanding of Credit Unions Interest in a Shariah Compliant Credit Union account and products
Background & Objectives
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Quantitative approach was used - 206 face-to-face interviews conducted in Glasgow
All interviewing was undertaken by Taylor Mackenzie
All respondents practicing Muslims and financial decision makers
Loose quotas were set on age to ensure that the sample reflected the local Muslim population.
Analysed using Snap
Method & Sample
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Final Sample Structure – Age Quotas
Quota
%
Achieved
%
Quota
No of Interviews
Achieved
No of Interviews
16-24 26 24 52 50
25-34 29 32 58 66
35-59 37 33 74 68
60+ 8 11 16 22
Total 100 100 200 206
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Demographic Profile
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Gender: 61% male, 39% female
Age: Reasonable spread of ages – Minority in the 60+band (11%)
Employment: Two thirds (68%) in employment full time /part time or self employed. 16% looking after family
Majority (90%)have more than one adult in the household-
Majority are families with children (82%)
Over half (59%) in rented accommodation private or social, a third (36%) owner occupier
Summary of Demographics
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61% male and 39% female
Age and Gender
Age
11%
33%
32%
24%
0% 5% 10% 15% 20% 25% 30% 35%
60+
35 - 59
25 - 34
16 - 24
Base: 206
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Adults in Household
Number of adults in household
8%
19%
21%
19%
23%
9%
0% 5% 10% 15% 20% 25%
Six +
Five
Four
Three
Tw o
One
Base: 206
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Majority have children under 16 (82%)
Number of children (under 16) in household
Number of children (under 16) in household
8%
29%
29%
16%
18%
0% 5% 10% 15% 20% 25% 30% 35%
Four
Three
Two
One
None
Base: 206
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Employment Status
%
Employed (full time or part time) 54
Self employed (full or part time) 14
Looking after home /family 16
Full time education 9
Unemployed and available for work 3
Retired 3
Permanently sick /disabled 1
Base: 206
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Housing Status
Housing Status
4%
39%
20%
36%
0% 10% 20% 30% 40% 50%
Other
Rent private
Rent social
Ow ner occupier
Base: 206
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Financial Decision Maker
Who makes financial decisions?
3%
19%
42%
35%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Me & other family
Me & parent(s)
Me & partner
Only myself
Base: 206
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Current Financial Product Holdings Yes
(%)
No
(%)
Current Account (Bank or Building Society)
81 19
Insurance (Home contents etc) 36 64
Mortgage 35 65
Savings Account (Bank or Building Society)
33 67
Credit card 29 71
Personal loan from a family member 16 84
Bank Loan 9 91
Personal Loan from a friend 5 95
Credit Union Account 2 98
Base: 206
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No of adults with bank/CU account v’s no adults on household
No. adults w ith no bank/CU account v's no. adults in household
8%
19%
17%
13%
15%
14%
14%
8%
19%
21%
19%
23%
9%
0% 5% 10% 15% 20% 25%
Six +
Five
Four
Three
Tw o
One
None
Base: 206
No. adults
No. adults no bank/CU
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Credit Card Usage
Agree Disagree Don’t Know
% % %
I pay off my balance every month
83 17
I use my credit card to help me spread out payments for large purchases
32 68 -
I don’t pay interest on my credit card
60 38 2
I use my credit card to help me juggle my finances
62 36 3
Base 60
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Reasons for self/other adults in household not having bank account
Reason Single Most Important reason
No need 70 62
Not compliant with Shariah Law 28 15
Language Problems 24 4
Don’t have regular income 18 11
Don’t trust banks 7 6
Convenience 3 1
Can’t empty the account when I need to
2 -
No banks or credit unions near my home
- 2
Base 178
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Value of Current Savings
Value of current savings
39%
36%
6%
3%
4%
12%
0% 10% 20% 30% 40% 50%
Refused
£5k+
£2-£5k
£1-£2k
£500-£1,000
Less than £500
Base: 69 (Those with savings)
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Usual method of bill payment
Usual method of bill payment
3%
4%
9%
24%
47%
73%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Other
PayPoint
Cheque
Standing Order
Direct Debit
Cash
Base: 206
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Sources used to meet unexpected bills
Up to £500
£500-£1000
£1001-£2000
>£2000
% % % %
Borrow from friends/family
54 74 76 78
Bank loan 5 7 11 12
Credit card 8 5 5 6
Borrow from an unlicensed loan provider
1 2 3 5
From existing savings
41 27 23 21
Base 206
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Ever taken a loan from a non–regulated source
Ever taken a loan from non-regulated source
21%
16%
3%
59%
0% 10% 20% 30% 40% 50% 60% 70%
Yes, longer ago
Yes, 2-5yrs ago
Yes, in last yr
No, never
Base: 206
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Relative importance of financial product features
Very
important
Quite
Important
Neither
Nor
Not very important
Not at all important
% % % % %
Interest charges
63 22 16 - -
Trust 52 30 18 - -
Compliant with Shariah Law
44 33 18 3 1
Location of service provider
21 42 24 13 -
Used them before
30 35 32 3 -
Base 206
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Knowledge and attitudes to Credit Unions
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Knowledge of credit unions
Do you know what a credit union is?
17%
43%
40%
0% 10% 20% 30% 40% 50%
Not sure
No
Yes
Base: 206
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Knowledge of credit unions
True False Don’t know
% % %
You can save and borrow money with a credit union
78 3 19
Credit unions are just like banks 42 40 19
You can repay a credit union loan early without a penalty
60 8 32
You have to have savings to take out a loan
58 8 34
I don’t know much about credit unions
18 53 28
Base: 118
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Interest in Shariah Compliant Credit Union Product
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Interest in a Shariah compliant credit union product
Interest in a Shariah compliant credit union product
6%
10%
15%
41%
28%
0% 10% 20% 30% 40% 50%
Not at all interested
Not very interested
Neither nor
Quite interested
Very interested
Base: 206
Reasons for interest:borrow/save within confines of Shariah Law (97%), money would be safe (57%)
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Reasons for not being interested in Shariah compliant credit union product
Reasons for not being interested in Shariah compliant credit union product
25%
35%
51%
0% 10% 20% 30% 40% 50% 60%
Wouldn't use anorg I don't know
Don't trust anyoneelse w ith my
money
Not concerned w ithbeing Shariah
compliant
Base: 63 (Those not interested)
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Preferred locations to access Shariah compliant credit union product
Preferred locations to access Shariah compliant credit union product
11%
17%
24%
41%
41%
73%
100%
0% 20% 40% 60% 80% 100% 120%
Housing Association
Local Council Off ice
PayPoint at a local shop/post off ice
Credit Union off ice in city centre
Online
Community Centre
Mosque
Base: 143 (Those interested)
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Should Shariah compliant credit union be authenticated
Should Shariah compliant credit union account be authenticated
1%
5%
21%
76%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Muslim credit union off icial
MP/local councillor
No need
Imam of local Mosque
Base: 206
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Interest in other Shariah Compliant Products
Interest in other Shariah compliant products
20%
1%
7%
25%
41%
5%
20%
3%
4%
24%
41%
7%
0% 10% 20% 30% 40% 50%
Don't know
Not at all interested
Not very interested
Neither nor
Quite interested
Very interested
Base: 206
Mortgage
Loans -£2k
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Level of borrowing interested in
%
Up to £500 2
£500-£1000 3
£10001-£1500 3
£1501-£2000 14
Don’t know 74
Base 95
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Conclusions and Recommendations
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Opportunity to increase access/ uptake of a wider range of
financial services amongst the Muslim community current accounts are held by a majority, lower
incidence of mortgages, savings and loans Based on our findings we believe there is a need for a
Shariah Compliant Product. Essential for this product to have a number of specific
characteristics namely products on offer must be within the confines of
Shariah Law prefer to access through the Mosque authenticated by the Imam of the Mosque cash must be one of the payment methods on offer
Conclusions and Recommendations (1)
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To optimise product appeal and uptake awareness and
knowledge of how a credit union works must be improved differences from more traditional providers develop trust for long term relationship
Conclusions and Recommendations (2)
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Shariah Compliant Credit Union Product Research
Presentation of Findings
Prepared for: DWP Financial Inclusions Champion Initiative (West of Scotland)
Date: June 2010