Fiserv’s latest Future Trends in U.K. Banking report found that the nation’s credit union assets are expected to surge to £2.2 billion by 2020.
The financial services technology company’s research, which was announced yesterday (Nov. 25), also showed that the number of credit union members, including both individuals and SMEs, is set to grow by 70 percent, increasing from 1 million currently to 1.7 million over the next five years.
“The ability for small businesses to thrive is vital to the U.K. economy, and I believe community lending has an important part to play in the future of U.K. banking and growth of SMEs,” Conservative MP Guy Opperman told Fiserv in reference to the research findings.
“The technology drive and forecasted growth over the next few years of SMEs accessing finance via credit unions is a massive step, and it will enable business owners to access the best sources of funding. This in turn will have a positive impact on U.K. employment figures and economy,” Opperman continued.
According to the report, the projected growth will lead to an increase in credit union lending to businesses. The increase in members and assets will help credit unions to support an estimated £1.3 billion in loans to members by 2020, compared to £680 million in 2014. SMEs are estimated to receive 10 percent of this amount (or £130 million).
“Credit union membership in the U.K. has previously been low, but as awareness of this form of alternative lending spreads, more SMEs are likely to take membership. As demand for SME lending increases, both traditional high street lenders and credit unions have the opportunity to implement new technology to take advantage of this growth,” said Travers Clarke-Walker, Chief Marketing Officer, International Group of Fiserv. “The U.K. economy is projected to expand relatively robustly over the medium term, and a robust economy can support many forms of finance.”