The Boom! Community Bank is like a bank in that it lends to borrowers and looks after money for savers, but unlike a bank it does not operate to make a profit. It is a co-operative which is owned by its members.
The County Council worked with key stakeholders and partners to develop the credit union which opened in October 2008.
Boom deals primarily with loans between £300-£15,000 and savings accounts of £85,000. Savings in Boom are protected under the Financial Services Compensation Scheme (FSCS) and support ethical lending practices in local communities.
People who take out a loan pay interest, but gain five significant advantages:
- Repayments are more reasonable because a 'not for profit' structure means focus is on affordability and not excessive profits.
- There are no arrangement or service fees.
- Borrowers save as they repay their loans. When the loan is paid off, the accumulated savings become available to spend or to keep adding to.
- There are no penalties for repaying all or some of the loan early.
- Boom! Community Bank can also put you in touch with agencies that can provide you with advice on budgeting and debt management.