Plans to set up a new credit union for the Scottish farming sector have hit a brick wall in the shape of UK financial regulations.
For the past two years SAOS has been working with the University of Aberdeen on a new ‘financial intermediary’ to offer farmers access to ‘affordable, ethical financial products’.
The most likely model would have been a credit union, which has been used by farmers to great effect in many other parts of the world.
Through this mechanism farming families and rural businesses can deposit savings or short-term cash at reasonable interest rates, enabling others in the industry to borrow money on affordable terms for their own business plans.
But financial regulations sit with Westminster, and the ‘strict’ regime currently in place means a tailor-made credit union for the farming sector will not work.