Solent Credit Union enters administration – BBC News

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Solent Credit UnionImage copyright Google
Image caption Solent Credit Union declared a £48,000 loss in 2017

A credit union with more than 2,000 savers has gone into administration.

Solent Credit Union (SCU), based in Southampton, offered low-cost loans and other financial services to clients across much of Hampshire.

Administrators PKF Geoffrey Martin said the reason for the collapse was still unclear, although SCU had suffered from “a small number of defaults” on loans.

The administrators said no savers would lose money, thanks to the Financial Services Compensation Scheme (FSCS).

Image copyright Solent Credit Union
Image caption In an online message, administrators said savers’ money was safe

SCU declared a loss of £48,000 in 2017, “primarily because of bad debt expense”, after “another challenging year”.

It changed its loans policy in 2016 “to reduce the number of high-risk loans made”, according to the minutes of its annual meeting in 2018.

Director Nicholas Ridge said SCU had struggled to attract customers because of “a lack of investment” and competition from larger organisations.

The Association of British Credit Unions said SCU’s failure was not evidence of a problem across the sector.

Spokesman Matt Bland said: “Solent was a small credit union… [whose] business model was weak to begin with, which made it vulnerable to bad debt.”

In 2018, SCU received a “one-off grant” of £15,000 from Southampton City Council, which had previously given annual grants up to £25,000.

The administrators said savers would receive letters with details of how to reclaim money.

They said further announcements on the scale and causes of the debts would be made within the next two months.

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