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Strength in numbers

There are almost 500 credit unions in the country, all functioning under guidelines laid out in the 1979 Credit Union Act.

Each credit union is a co-operative, owned by its members and operated for their benefit on a not-for-profit basis. Each credit union is managed and controlled by a volunteer board of directors.

Essentially, a credit union is an extended version of the group kitty: members put money into a collective pot, from which they can later borrow. The loans taken out are based on the amount of money investors have put in.

On average, credit unions will lend around three times a person's savings. Interest is at preferential rates: the 1979 Act set a legal limit of 12.6 per cent APR. Any profits made on the loans are subsequently returned to credit-union members as interest.

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