About Street Cred Union

1           Origins

1.1 Streetcred was established in late 2000 by organisations and individuals engaged with and committed to the regeneration strategies and agendas of the Borough of Rochdale.

1.2 Its overarching strategic aims were, and remain:

1.2.1 to tackle financial exclusion throughout the Borough’s most excluded communities and groups; and

1.2.2 to develop a viable community owned and controlled social enterprise offering its members low cost financial services.

1.3 Its Mission Statement asserts that Streetcred Credit Union is committed to:

1.3.1 caring for the financial well being of its members and providing them with personal financial services of the highest quality;

1.3.2 improving the economic and social well being of its members;

1.3.3 non-discrimination in race, nationality, gender, religion or politics; and

1.3.4 social responsibility.

1.4 The initiative was developed on the foundation of a partnership between four Borough-wide organisations, each of which had identified the need for the services a Credit Union provides for its client and membership base.  The partners, were, and remain:

1.4.1 Rochdale Metropolitan Council's Housing Department;

1.4.2 Ashiana Housing Association;

1.4.3 The Citizens Advice Bureau; and

1.4.4 Rochdale Federation of Tenants and Residents Associations.

1.5 The partners successfully secured initial funding primarily from the European Regional Development Fund and the Single Regeneration Budget 5 with other sources being accessed subsequently, including Middleton Pride.

1.6 Kirkholt Credit Union also played a crucial part in the development stages as the only local Community Credit Union and with 10 years experience in the democratic principles and governance structures central to best practice. Kirkholt Credit Union formally merged with Streetcred on 30 September 2001.

1.7 A feasibility study conducted by the Association of British Credit Unions Ltd (ABCUL) clearly identified that a Borough-wide Credit Union would enjoy the support, not only of the communities of the Metropolitan Borough of Rochdale, but also of its industries and services.

1.8 With startup and year 1 funding secured, a training programme for Board members completed and core structures and resources in place, Streetcred completed its Financial Services Agency (FSA) assessment on 12 March 2001 and was formally launched on 1 April 2001.

2           The Borough of Rochdale

2.1 Rochdale Metropolitan Borough Council (RMBC) covers a geographical area of 62 square miles and incorporates the four principal Townships of Heywood, Middleton, Pennines and Rochdale.

2.2 The Borough has a population of 208,200 living in a mixture of social housing and private properties providing approximately 88,500 housing units, of which 64% are owner occupied.

2.3 There are 70 Council housing estates with over 22,000 units between them, nearly 17,000 of which are owned by Rochdale Metropolitan Borough Council (RMBC) and which from 1 April 2002 will be managed by an Arms Length Management Organisation, Rochdale Borough Housing Ltd.

2.4 A further 8,500 homes are rented properties owned by Housing Associations, including the major estates of Langley (3,500) and Darnhill (1,000).

2.5 It is these Social Housing Estates, together with Inner Rochdale, which are the prime locus of the substantial and significant deprivation experienced within the authority. Rochdale MBC is one of the 88 local authority areas targeted by the Government's 10-year Neighbourhood Renewal Strategy; the area is ranked between the 13^th - 45^th most deprived (of 354) on the range of criteria used in the Index of Multiple Deprivation 2000 (IMD2000).

2.6 At Ward level, the IMD2000 shows the Borough of Rochdale with 8 wards in the most deprived 10% of the 8,414 wards nationally: the following table shows their respective ranking (where 1 is the most deprived and 8,414 the least) in both the overall score and on the associated Child Poverty Index.

2.7 It is precisely these areas and their communities that are the central focus of the Streetcred mission and where it is expected to play a critical role within the Borough's regeneration strategies and delivery plans.

3           Core Business

3.1 Streetcred Credit Union's core business is the facility for savings and the provision of low cost loans to people who reside or work in the area of Rochdale Borough. It also aims to build loyalty to its mutuality purposes by education in financial matters and by providing high levels of service and added value to its product through insurance and other financial products.

3.2 At the earliest opportunity Streetcred will introduce a dividend to members, providing interest on savings comparable to similar institutions and competitors.  This is particularly important in order to encourage savers and saving.

3.3 Loans are on offer up to a maximum of £3,000. The current statutory maximum limit is £5,000.  At this stage of Streetcred’s development, large loans would result in an inequitable distribution of assets and disadvantage to some members. In these early years it is anticipated that loans will be for domestic, household and holiday expenses. Recent studies of prevailing commercial interest rates in the area at this level average 36% APR compared with Streetcred's 12.68%

3.4 Streetcred offers access to regular saving at a minimal level to its entire membership. Loans are supported on a 3 to 1 ratio to savings up to the current maximum value of £3,000.

3.5 A small dividend is planned for the end of year 2002.  The longer term vision is to match the interest rates paid to savers by competing schemes from banks and building societies etc.

4           Membership

4.1 Steetcred was established on the basis of a Borough-wide Common Bond and, consequently, has in its initial year faced the challenging task of establishing roots as widely as possible throughout the whole area.

4.2 Progress to date has been very positive as the following statistics for the subscribing membership as at the 15 February 2002 demonstrate.

4.3 This first-year success provides a strong foundation on which to build membership numbers through the period of this Business Plan: financial planning is based on the assumption of recruiting an additional 1,500 subscribing members each year to 6,000 by 31 March 2004.

4.4 The Streetcred Board and Management are confident that this can be achieved through maximising and extending the partnerships and networks it has already linked into, as outlined in section 9 below.

4.5 There is substantial political support from all key players - the Borough's MPs, leading Members of the Council and senior council officers - who have all acknowldeged the significance of Streetcred's role in combating social and economic exclusion.

5           Governance

5.1 Streetcred is affiliated to the Association of British Credit Unions Ltd (ABCUL) and has based its Governance structure on their model rules for Credit Unions.

5.2 The original Board of 15 members, drawn from among members from the founding partners and other key organisations has acknowledged the need to strengthen its membership following its first Annual General Meeting in April 2002 and to do so specifically in relation to both business expertise and connectivity with its target communities and market-areas.

5.3 The Board is also committed to strengthen its processes for accountability, both internally and externally and to review all its processes and procedures on the basis of the experience of the initial year.

5.4 In line with ABCUL guidance, the Board is fully signed up to enhancing and supporting an active and effective sub-committee structure of:

5.4.1 Supervisory Committee,

5.4.2 Credit Committee, and

5.4.3 Staffing Committee

6           Staff Team

6.1
The Staff Team to deliver this Business Plan will, from 1 April 2002, consist of:

6.2 The General Manager is responsible for the overall management of the credit union reporting to, and supporting, the Board. The key tasks are:

6.2.1 development and delivery of the Business Plan;

6.2.2 responsibility for adherence to FSA and Credit Union legislation;

6.2.3 responsibility for raising the profile of Streetcred within the Borough;

6.2.4 liaison with partners and other key local organisations;

6.2.5 liaison with local employers to increase membership and support;

6.2.6 development of marketing strategy and co-ordination of campaigns;

6.2.7 development and delivery of training for Board, staff and volunteers.

6.3 The Finance Manager is responsible for the day-today operations of the Credit Union and for providing financial advice to the General Manager and the Board. The key tasks are:

6.3.1 recording of information and production of financial reports;

6.3.2 day-to-day management of MSOs and liaison with volunteers;

6.3.3 liasing with Credit Committee;

6.3.4 credit control;

6.3.5 ensuring security of funds and correct use of funds and reserves;

6.3.6 general administration/health and safety.

6.4 The Member Services Officers' key responsibilities are:

6.4.1 provision of full range of services to members;

6.4.2 liaison with volunteers and community workers from other agencies;

6.4.3 community marketing/leafleting etc.

7           Volunteers

7.1 Streetcred's first-year success has depended significantly on the work of volunteers and has enjoyed the benefits of a team of over 30 so far.

7.2 A structured approach has been adopted to training based on the use of Trained ABCUL Associates to deliver training modules obtained from ABCUL, and detailed records are maintained to ensure each volunteer follows and completes an appropriate programme.

7.3 Streetcred's Finance Manager holds the Diploma in Credit Union studies from University College Cork, Ireland and the Board has appointed a Board member as Training Officer.

7.4 Streetcred has also experimented successfully with enabling some volunteers to graduate to employment within the organisation at peak times and as funding allowed as either Member Services Officers or Outreach Workers.

7.5 This progression route of volunteer through training to employment will remain a central feature of Streetcred's future, and one it is intended to expand alongside and as part of its own growth.

8           Resources

8.1 Streetcred's registered office, located at 132 Yorkshire Street, Rochdale, has been secured on a three and a half year lease to October 2004 and provides accessible coverage for its central Rochdale membership.

8.2 A secondary site is maintained at the already existing premises of Kirkholt Credit Union, located at the heart of the Borough's largest Council Housing estate. In addition to serving the local community, this office has been identified for use during any disaster recovery situation.

8.3 The Middleton town centre office, in Fountain Street, was opened in October 2001.

8.4 If, as is anticipated, additional funding to that identified in this Business Plan can be secured from the New Deal for Communities scheme in central Heywood, an office will also be established and staffed in that Township.

8.5 In order to meet the demand of running a multi-site organisation serving, a projected membership of around 10,000, Streetcred has introduced an integrated computer system using the Kesho Curtains software. This system runs simultaneously on ADSL linkages at the three primary sites.

8.6 Agreement has been sought for the establishment of collection points alongside rent collection in the Borough's Housing Offices and a positive response has been indicated.  Streetcred already has 15 Council Paypoints, one Housing Association Paypoint and two Community Collection points.

8.7 Streetcred has secured the services as its Auditors of Hallidays of Portland Street, Manchester. This company has fifteen years experience of Credit Unions, making it well placed to provide professional advice.

8.8 Agreement has been reached with Rochdale Borough Council for payroll deduction from its workforce which, though already within another common bond, has still great potential as to date only 8% of a workforce of 13,000 have joined the existing employees' credit union.

9           Partners & Networks

9.1 Streetcred is committed to extending its connections with its founding partner organisations - and with their partners - in order to deepen its roots in its major constituencies.

9.2 The Borough's Housing Department, together with RoFTRA and its member Tenants & Residents Associations, offer direct and regular contact with the occupants of the 17,000 council tenancies. As identified in 8.6 above, a good start has been made in working with the Housing Department to set up collection points in their Housing Offices. It is intended to increase the number of offices offering that facility and to 'recruit' Housing Officers as Streetcred advocates.

9.3 RoFTRA is the umbrella organisation for the Borough's 36 Tenants & Residents Associations and its own recent growth has resulted in the establishment of a staff team of 14 who are in regular and routine contact with these most critical organisations at the heart of the council estates on which the activity of loan sharks is such a threat.

9.4 RoFTRA is also a member of the recently formed Rochdale Borough Community Consortium, a partnership of the Borough's 3 umbrella organisations: RoFTRA, the Rochdale Race Equality Council (REC) and the Council for Voluntary Service (CVS Rochdale). The Consortium has a key role within the emerging Local Strategic Partnership structures.

9.4.1 REC is well established within the 10% of the Borough's population whose roots are in Black and Minority ethnic cultures, mainly of Asian origin. Ashiana Housing Association, another of Streetcred's founding partners also has links with those communities, as well as with the local Registered Social Landlord networks.

9.5 The extent of voluntary organisation activity is evident within the membership of CVS Rochdale, who provide support for voluntary and community groups Borough wide.  CVS has a wide and diverse membership of 495 groups representing all sections of the community.

9.6 The CVS sponsored Volunteer Development Agency provides Borough-wide ongoing training to the voluntary sector as well as facilitating the recruitment of volunteers: in the past year alone they have matched and referred 254 new volunteers to organisations throughout the Borough.

9.7 Streetcred has close clinks with Council's Regeneration Unit and the Borough's Township offices and officers.

10       Development Priorities

10.1 Community links: Streetcred will explore and exploit all the opportunities provided by its partnership networks to embed Credit Union activity within the Borough's range of communities by seeking its incorporation within existing activities and organisations.

10.2 This approach will be based on 'recruiting' existing development workers and volunteers already located within the Borough's communities which are the focus of the social inclusion agenda such as RoFTRA's four strong team of Community Engagement Workers, REC's community workers and equivalent staff across the Council's departments.

10.3 It will also involve seeking the direct engagement with Streetcred's growth of established organisations within those communities through activities from recruitment campaigns to setting up collection points within them.

10.4 Priority Wards: Streetcred is committed to establishing at least one satellite office within each of the eight priority wards, usually through co-operation with one or more organisations already at work within them.

10.5 Volunteer support: Streetcred will continue to recruit and encourage the involvement of volunteers throughout the whole range of its activities and will focus its recruitment within the target communities themselves.

10.6 Training: Streetcred will develop and extend its training activities to ensure that Board Members, staff and volunteers all have regular access to appropriate training opportunities.

10.7 As a critical component of this commitment, Streetcred will develop a pool of trained volunteers to take an active part in delivery of services on a regular basis and also available for at least occasional paid employment within the organisation. This will be an important resource for Streetcred's core organisation to provide cover for holidays and sickness absence of staff and the additional staffing necessary to service seasonal activity peaks and growth periods.

10.8 Local offices: Streetcred will explore every opportunity, within the funding constraints, to establish additional local offices to its present three. One in Heywood is a priority, and funding prospects through that Township's NDC framework will be explored. Additional offices in the main areas of the Pennines Township, such as Littleborough and Milnrow would also be valuable resources for both Streetcred and the local communities.

11       Risk Assessment

11.1 The Kirkholt site will act as the disaster recovery site in the event of catastrophic loss of the primary office at Yorkshire Street and arrangements will be made to secure data and loan agreements within this site.

11.2 The Statutory “Fidelity bonding” arrangements are in place through ABCUL.

11.3 All lending policies will be reviewed to ensure that risk is managed effectively in approving loans, monitoring repayment and debt control management.

11.4 Key directors have direct experience of working with other credit union organisations such as Kirkholt Credit Union, Metro Moneywise and ABCUL.

12       Income Generation

12.1 During the first year of this Business Plan Streetcred is committed to pilot initiatives aimed at introducing income through additional services as outlined in the following paragraphs.

12.2 Lottery: Research shows that Credit Union Member Lotteries are very popular for credit unions in terms of income generation and increasing membership. Based on the success of other credit unions Streetcred will introduce a member’s lottery in August 2002.

12.3 Members’ Insurance: In partnership with Cuna Mutual and Norwich Union a package of discount insurance services will be promoted to members later this year.  Depending on sales a fee starting at 2.5% per policy sold will be returned to the credit union.  This will be the first pilot of this kind of scheme.

12.4  Annual Administration Fee: Credit Unions throughout the country have successfully introduced a small annual administration fee, primarily as an aid to clearing dormant accounts.

12.5 No income assumptions in respect of these potential sources of income generation are included in the following financial forecast.

13       Financial Forecast

13.1 The 5-year forecast for operating costs consequential on the implementation of this Business Plan is shown in the following table:

13.2 In common with all Credit Unions, Streetcred's own income stream needs a full three years activity to become self-sustaining: it has only had one year to date. Consequently it needs continued funding for two further years.

14       Funding Requirement

14.1 In addition to supporting the operational costs identified above, Streetcred is statutorily obliged to build up reserves at the rate indicated in the table below.

14.2 Consequently, the funding requirement is arrived at by adding the dictated reserves to the operating expenses and subtracting the income generated through loan interest and related activities as in the following table:

14.3 It intended to seek this additional funding through an application to the Neighbourhood Renewal Fund.

14.4 As the table shows, an investment of this funding level provides excellent returns in future years through a substantial, self-sustaining social enterprise closely linked to the target communities and offering practical and essential services to individuals and families within them.

15       Performance indicators and targets

15.1 The detailed financial forecasts, using a version of the ABCUL financial model adapted for use by a multi-site, Borough-wide Credit Union, show that if the fundamental targets are met, a range of other outcomes can confidently be anticipated.

15.2 These fundamentals are:

15.2.1 annual membership growth;

15.2.2 the average shares per member per week; and

15.2.3 the loan/share ratio.

15.3 The targets for these, and the related aspects of future performance thus provide the critical Performance Indicators and Targets shown in the following table:

15.4 Performance Indicators to measure and monitor compliance with Streetcred's social objectives in relation to effective service delivery among the deprived communities and excluded groups will be developed by September 2002.

Street Cred Credit Union Ltd

132 Yorkshire Street
Rochdale
OL16 1LD
01706 658293