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					 Shariah Compliant Credit Union
        Product Research
        Presentation of Findings

Prepared for: DWP Financial Inclusions Champion Initiative
                  (West of Scotland)
                     Date: June 2010


                                             www.assenti-research.co.uk
Background & Objectives
 Assenti Research commissioned to establish interest in a Shariah
compliant credit union product among Glasgow’s Muslim
population

 Key research objectives to determine:
      Current usage and attitudes to financial products and
     services
      Knowledge and understanding of Credit Unions
      Interest in a Shariah Compliant Credit Union account and
     products




                                                                     www.assenti-research.co.uk
Method & Sample

 Quantitative approach was used - 206 face-to-face     interviews
conducted in Glasgow
 All interviewing was undertaken by Taylor Mackenzie
 All respondents practicing Muslims and financial decision makers
 Loose quotas were set on age to ensure that the sample
reflected the local Muslim population.
 Analysed using Snap




                                                                     www.assenti-research.co.uk
 Final Sample Structure – Age Quotas

                                Quota            Achieved
        Quota   Achieved   No of Interviews   No of Interviews
         %         %


16-24    26       24             52                 50

25-34    29       32             58                 66

35-59    37       33             74                 68


60+       8        11            16                 22


Total    100      100            200                206




                                                                 www.assenti-research.co.uk
Demographic Profile




                      www.assenti-research.co.uk
Summary of Demographics

 Gender: 61% male, 39% female
 Age: Reasonable spread of ages – Minority in the 60+band (11%)
 Employment: Two thirds (68%) in employment full time /part
time or self employed. 16% looking after family
 Majority (90%)have more than one adult in the household-
 Majority are families with children (82%)
 Over half (59%) in rented accommodation private or social, a
third (36%) owner occupier




                                                                   www.assenti-research.co.uk
Age and Gender
 61% male and 39% female

                                Age



16 - 24                                     24%


25 - 34                                                 32%


35 - 59                                                  33%


   60+                   11%


      0%     5%    10%         15%    20%   25%   30%    35%
                                Base: 206

                                                               www.assenti-research.co.uk
Adults in Household
              Num ber of adults in household


 One                   9%

 Tw o                                                      23%

Three                                          19%

 Four                                                21%

 Five                                          19%

 Six +               8%

        0%   5%        10%          15%        20%          25%
                            Base: 206




                                                                  www.assenti-research.co.uk
 Number of children (under 16) in household
  Majority have children under 16 (82%)

                  Number of children (under 16) in household


None                                         18%



 One                                   16%



 Two                                                           29%



Three                                                          29%



Four                 8%


        0%   5%        10%       15%          20%      25%     30%   35%
                                    Base: 206




                                                                           www.assenti-research.co.uk
Employment Status

                                    %

Employed (full time or part time)   54

Self employed (full or part time)   14
Looking after home /family          16

Full time education                 9
Unemployed and available for work   3
Retired                             3
Permanently sick /disabled          1


Base: 206


                                         www.assenti-research.co.uk
Housing Status
                              Housing Status



 Ow ner occupier                                     36%



      Rent social                      20%



     Rent private                                      39%



           Other        4%


                   0%        10%     20%       30%   40%     50%
                                       Base: 206




                                                                   www.assenti-research.co.uk
 Financial Decision Maker

                              Who makes financial decisions?



     Only myself                                                       35%




    Me & partner                                                                   42%




  Me & parent(s)                               19%




Me & other family        3%



                    0%   5%     10%    15%    20%    25%       30%   35%     40%    45%
                                               Base: 206




                                                                                          www.assenti-research.co.uk
 Current Financial Product Holdings
                                             Yes   No
                                             (%)   (%)
Current Account (Bank or Building Society)   81    19

Insurance (Home contents etc)                36    64
Mortgage                                     35    65

Savings Account (Bank or Building Society)   33    67
Credit card                                  29    71
Personal loan from a family member           16    84
Bank Loan                                     9    91
Personal Loan from a friend                   5    95
Credit Union Account                          2    98
Base: 206

                                                         www.assenti-research.co.uk
No of adults with bank/CU account v’s no adults on
household

             No. adults w ith no bank/CU account v's no. adults in
                                   household


None                            14%

 One                    9%
                                14%

 Tw o                                             23%
                                    15%
                                          19%               No. adults
Three                          13%
                                                            No. adults no bank/CU
 Four                                           21%
                                      17%

 Five                                     19%
                                          19%

Six +                 8%
                      8%

        0%     5%      10%     15%        20%         25%
                        Base: 206



                                                                                    www.assenti-research.co.uk
Credit Card Usage
                               Agree   Disagree   Don’t Know

                                %         %           %

I pay off my balance every      83       17
month
I use my credit card to help    32       68           -
me spread out payments for
large purchases

I don’t pay interest on my      60       38           2
credit card
I use my credit card to help    62       36           3
me juggle my finances
Base 60


                                                               www.assenti-research.co.uk
  Reasons for self/other adults in household not having
  bank account
                                         Reason     Single Most
                                                  Important reason
No need                                    70           62

Not compliant with Shariah Law             28           15
Language Problems                          24            4
Don’t have regular income                  18           11
Don’t trust banks                          7             6
Convenience                                3             1
Can’t empty the account when I need to     2             -
No banks or credit unions near my home     -             2
Base 178




                                                                www.assenti-research.co.uk
Value of Current Savings

                         Value of current savings


  Less than £500                    12%

    £500-£1,000         4%

         £1-£2k         3%

         £2-£5k              6%

           £5k+                                             36%

        Refused                                                    39%

                   0%        10%          20%       30%       40%        50%
                                  Base: 69 (Those w ith savings)




                                                                               www.assenti-research.co.uk
Usual method of bill payment

                                  Usual method of bill payment


         Cash                                                                  73%


   Direct Debit                                              47%


Standing Order                           24%


       Cheque                9%


     PayPoint          4%


         Other         3%


                  0%        10%    20%     30%     40%       50%   60%   70%     80%
                                                 Base: 206




                                                                                       www.assenti-research.co.uk
  Sources used to meet unexpected bills

                 Up to £500   £500-   £1001-   >£2000
                              £1000   £2000
                     %         %          %      %
Borrow from          54        74         76     78
friends/family
Bank loan            5          7         11     12
Credit card          8          5         5      6
Borrow from          1          2         3      5
an unlicensed
loan provider
From existing        41        27         23     21
savings
Base 206

                                                      www.assenti-research.co.uk
Ever taken a loan from a non–regulated source

              Ever taken a loan from non-regulated source



         No, never                                          59%



     Yes, in last yr        3%



   Yes, 2-5yrs ago                 16%



   Yes, longer ago                   21%


                       0%    10%   20%   30%   40%   50%   60%    70%
                                         Base: 206




                                                                        www.assenti-research.co.uk
Relative importance of financial product features

                  Very        Quite     Neither    Not very    Not at all
                important   Important    Nor      important   important


                   %           %          %          %            %
 Interest          63          22         16          -            -
 charges
 Trust             52          30         18          -            -

 Compliant         44          33         18         3            1
 with Shariah
 Law
 Location of       21          42         24         13            -
 service
 provider
 Used them         30          35         32         3             -
 before
 Base 206


                                                                       www.assenti-research.co.uk
Knowledge and attitudes to Credit Unions




                             www.assenti-research.co.uk
Knowledge of credit unions
               Do you know w hat a credit union is?



    Yes                                               40%



     No                                                 43%



Not sure                     17%


          0%       10%       20%       30%       40%          50%
                               Base: 206


                                                                    www.assenti-research.co.uk
  Knowledge of credit unions
                                        True   False   Don’t know


                                         %      %          %
You can save and borrow money with      78      3         19
a credit union
Credit unions are just like banks       42      40        19
You can repay a credit union loan       60      8         32
early without a penalty
You have to have savings to take out    58      8         34
a loan
I don’t know much about credit unions   18      53        28
Base: 118




                                                                www.assenti-research.co.uk
      Interest in Shariah
Compliant Credit Union Product




                        www.assenti-research.co.uk
 Interest in a Shariah compliant credit union product

                Interest in a Shariah com pliant credit union product



      Very interested                                    28%


      Quite interested                                                  41%


           Neither nor                     15%


   Not very interested               10%


   Not at all interested        6%


                           0%    10%        20%         30%      40%          50%
                                                 Base: 206



Reasons for interest:
borrow/save within confines of Shariah Law (97%), money would be safe (57%)



                                                                                    www.assenti-research.co.uk
Reasons for not being interested in Shariah compliant
credit union product

         Reasons for not being interested in Shariah com pliant
                         credit union product


Not concerned w ith
   being Shariah                                                  51%
     compliant

 Don't trust anyone
   else w ith my                                 35%
       money

   Wouldn't use an
                                         25%
   org I don't know


                      0%   10%    20%     30%      40%     50%          60%
                             Base: 63 (Those not interested)




                                                                              www.assenti-research.co.uk
Preferred locations to access Shariah compliant
credit union product
         Preferred locations to access Shariah compliant credit union
                                   product


                            Mosque                                            100%

                 Community Centre                                    73%

                              Online                     41%

   Credit Union office in city centre                    41%

PayPoint at a local shop/post office               24%

               Local Council Office           17%

               Housing Association           11%

                                        0%   20%     40%       60%   80%   100%   120%
                                               Base: 143 (Those interested)




                                                                                         www.assenti-research.co.uk
Should Shariah compliant credit union be
authenticated

               Should Shariah compliant credit union account be
                                authenticated


      Imam of local Mosque                                        76%


                    No need               21%


         MP/local councillor        5%


 Muslim credit union official   1%


                               0%   10% 20% 30% 40% 50% 60% 70% 80%
                                                Base: 206




                                                                        www.assenti-research.co.uk
 Interest in other Shariah Compliant Products

                        Interest in other Shariah com pliant products


   Very interested              7%
                               5%

   Quite interested                                            41%
                                                               41%

        Neither nor                            24%
                                                25%                        Mortgage
Not very interested           4%                                           Loans -£2k
                                7%

Not at all interested         3%
                             1%

        Don't know                         20%
                                           20%

                        0%         10%   20%      30%      40%       50%
                                          Base: 206




                                                                                        www.assenti-research.co.uk
 Level of borrowing interested in


                                    %

Up to £500                          2

£500-£1000                          3
£10001-£1500                        3

£1501-£2000                         14
Don’t know                          74
Base 95




                                         www.assenti-research.co.uk
Conclusions and Recommendations




                        www.assenti-research.co.uk
Conclusions and Recommendations (1)
 Opportunity to increase access/ uptake of a wider range of
financial services amongst the Muslim community
      current accounts are held by a majority, lower
     incidence of mortgages, savings and loans
 Based on our findings we believe there is a need for a
Shariah Compliant Product.
 Essential for this product to have a number of specific
characteristics namely
      products on offer must be within the confines of
     Shariah Law
      prefer to access through the Mosque
      authenticated by the Imam of the Mosque
      cash must be one of the payment methods on offer

                                                               www.assenti-research.co.uk
Conclusions and Recommendations (2)
 To optimise product appeal and uptake awareness and
knowledge of how a credit union works must be improved
      differences from more traditional providers
      develop trust for long term relationship




                                                         www.assenti-research.co.uk
 Shariah Compliant Credit Union
        Product Research
        Presentation of Findings

Prepared for: DWP Financial Inclusions Champion Initiative
                  (West of Scotland)
                     Date: June 2010


                                             www.assenti-research.co.uk

				
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