Annual Report2014 - 2015Promoting Saving &Dealing with Debt

Invitation To Investfor the benefit

of the community

for your financial well-being®

fairbanking

Personal Loan

Instant Saver Loan

London Capital Credit Unionthe savings & loans co-operative

Key facts Product Permanent Shares CapitalOffer opened 1st July 2019Offer closes 30th June 2020Location of project(s) London and South East Regions Offer price, per share £1Min. investment amount £10,000Max. investment amount £180,000

Executive SummaryLondon Capital Credit Union is a financial co-operative, owned and controlled by its members and providing financial services to communities across London. We are one of the country’s fastest growing credit unions: from 675 members and £493,000 on loan in 2008 to over 15,000 members and nearly 11m on loan at the end of 2017.

Almost all of our members come from some of the least affluent parts of our community. What we offer them is straightforward: (i) we help them to save and (ii) we lend them money at reasonable interest

rates, steering them clear of payday lenders and loan sharks.

We play a significant role in alleviating poverty (as the Joseph Rowntree Foundation has recently identified). That is why we have an ambitious expansion programme. We want to extend our services to tens of thousands more people so as to reduce financial exclusion and the level of poverty in our community.

In the next three years, we expect to double our

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The Social CaseA single investment in non-transferable deferred shares provides ongoing benefits far beyond the amount invested. While we can raise loan capital through our members’ savings, there is a regulatory requirement to hold capital representing 10% of our assets. For example, an investment of £100,000 of deferred shares will allow us to release up to £1m to lend each year. With a typical loan repaid within a year the money can be lent out time and again multiplying its effect.

In 2013, analysts from a well-known City institution performed an assessment of the social and financial impact of our lending business. They concluded that on average for every pound that we lend to clear existing debts, our members save £1.25 each year in interest, bank charges and fees.

So the £100,000 of deferred shares allows £1m to be lent and leads to £1.25m in benefits to members in a single year, and over four years our members could save some £5m of loan costs. This is money that is likely to be used within the community and therefore provide further benefit by supporting local business and creating local employment opportunities.

membership, double the value of their savings and more than double the value of our loan book.

However, recent changes by the regulator mean that we need to raise an additional £1,000,000 of regulatory capital if we are to continue to grow as we have done. While we continue to build a capital buffer by retaining the surplus generated from our loans business, it is in the nature of our business model that we cannot generate higher margins without reducing lending risk and/or increasing the prices of our loans. This means that those most in need of our services would be unable to use and/or afford our services.

Rather than slow our growth or limit our lending we seek to attract additional capital investment through the issuance of non-transferable deferred shares. This booklet tells you more about the credit union and how you might join us and help us maintain our record as the UK’s fastest growing community credit union.

For every £10,000 invested we will be able to provide an additional £100,000 in low cost loans to those in need.

Deferred shares investment

Inc.Lending Capacity

Est. Min. Annual Social Impact

Est. Social Impact 5 Years

£50,000 £500,000 £625,000 £3,125,000

£100,000 £1,000,000 £1,250,000 £6,250,000

£250,000 £2,500,000 £3,125,000 £15,625,000

£500,000 £5,000,000 £6,250,000 £31,250,000

£1,000,000 £10,000,000 £12,500,000 £62,500,000

Our StoryThe London Capital Credit Union in its current form was created from a number of mergers of smaller credit unions across north London. We can trace our roots back to 1962 when members of the local West Indian community, who had found it difficult to access credit from mainstream banks, formed the Hornsey Co-operative Credit Union based around their church.

Based in our north London offices we have, in recent years, shown very high levels of growth, from 675 members and £493,000 on loan, in 2008 to over 15,000 members and nearly £11,000,000 on loan at the end of 2017.

What Is a Credit Union?A credit union is a not-for-profit financial co-operative owned and controlled by its members, and run for their mutual benefit. Credit unions usually offer a relatively simple set of savings and loans products: the latter generally at very modest rates of interest.

In the UK, credit unions tend to operate in the areas of the market not well served by mainstream financial institutions. As members’ incomes are usually lower than average, a credit union’s main competitors are likely to be niche players offering high-interest loans to those with poor credit profiles.

Because credit unions are not-for-profit organisations and tend to have a low cost-base, they are generally able to offer loans at a significant discount compared to their competitors. As a result, successive governments have encouraged the growth of credit unions, both in terms of their national coverage and the services they can offer. There has been a marked increase in the size of the credit union movement in the past 20 years. London Capital Credit Union has shown growth in both membership and trading at very much higher levels than the UK credit union sector as a whole.

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15,366

675

Membership

YE 2008 YE 2018

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

£10,773,096

£12,489,719£12,404,000

£10,664,000

Year On Year Variances

Share Balance Loan Balance

YE 2017 YE 2018

£14m

£12m

£10m

£8m

£6m

£4m

£2m

£0

£10,773,096

£12,489,717

£532,000 £493,000

10 Year Variances

Shares Loans

£14m

£12m

£10m

£8m

£6m

£4m

£2m

£0

YE 2008 YE 2018

FairBanking Mark - Five Star Award

The Fairbanking Foundation charity has awarded its first Mark certifications to credit unions with London Capital Credit Union receiving 5 stars for its ‘Saver Loan’ and ‘Instant Saver Loan’ products. Over the last ten years, the Credit Union has seen a 1,400% increase in members’ savings from £749,000 to £11.6 million at the end of 2017. As a co-operative, the Credit Union is owned and controlled by its members, not outside shareholders, so is proud to have its ethical values recognised in this way.

Member Satisfaction - Customer ServiceOur continuous growth continues to come from personal recommendations. Once again, 2017-18 saw continued focus in providing the best possible levels of customer service. We do this, not just because it is good for business, but critically, because our ‘customers’ are our members and they own the business. During 2018 we undertook our annual survey and asked our members how they rated us for customer service. Yet again the survey shows a high overall level of member satisfaction with the services we provide, with an average score of 8.5 out of a possible 10. Whilst it is not possible to please all the people all the time we do try to do that and the year has seen us become ever quicker in processing membership, loan applications and share withdrawals. In particular, the improved online access continues to be very popular. Continued high levels of member satisfaction is driving increased membership as people recommend us to friends, family and work colleagues.

for your financial well-being®

fairbanking

Personal Loan

Instant Saver Loan

Recent Financial PerformanceOur most recent audited annual report and audited accounts are available on our website. Hard copies are available upon request.

Why Choose London Capital Credit UnionAs with all investments the investor will want to ensure it is made in an organisation that is best placed to deliver the desired benefits. The following charts show that we are a market leader.

Loan/Savings Ratios (End Sept 2018)

LCCU

UK Average

93%

65%

Average Members (End Sept 2018)

LCCU

UK Average

15,366

4,377

Balance Sheet Size (End Sept 2018)

LCCU

LCCU

UK Avg.

UK Avg.

£10,773,096£12,489,717

£2,890,411

£4,424,658

Loans Balance Savings Value

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The Credit Union has helped me with my finances during some very difficult times in my life. The team were very helpful,

understanding and were able to assist me in resolving my financial issues efficiently and very quickly. The volunteers and team

are doing such a fantastic job!

I now have savings and no debt for the first time in my life!

I just have to say thank you to the Credit Union for being there when I needed them

most. A timely and quick process.

After my daughter’s disability benefits were stopped, we lived, day to day, using my credit cards. My loan application was approved and I paid off my credit cards. I will have saved around £680 in interest

payments alone by the time my credit union loan is paid off, and I’ll have my savings

too.

LCCU has helped me to plan my borrowing to help pay for things like Christmas and

holidays, but I always know I won’t be able to get out of my depth because I am building up savings as well as paying off

my loan.

When I needed help they were there for me. I’m more than grateful to the credit union.

Credit Union has taken away the financial stress of what I would normally have if I took a loan out with a bank. Plus I now

have savings for the first time ever!

It’s been several years of help now. They helped me with travel money, credit card repayments, buying a car and application

for my citizenship.

The Credit Union has helped me with supporting my children (clothes, household goods). I could not have managed without

them.

It has helped me to pay to visit my relatives after a long time, since the death of my

husband.

It has helped me to regain back my life due to my losing my job in the recession in 2008.

I have found Credit Union to be so always helpful with no hassles at all while

requesting for loans. I can’t thank you guys enough for always digging me out of the pit.

The credit union helped me to get my self esteem back after the illness and death of

my wife. I had lost my business, my car and my savings.

It’s an amazing financial model I think more banks should work that way.

London Capital Credit Union has been a source of assistance financially instead of

getting finance from loan sharks.

Greatly it has helped me through a financially turbulent last few years.

How We Have Helped Our Members

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Who Are Our Members?We have a diverse membership of some 15,000+ members, predominantly drawn from the Greater London region. A snapshot of our membership at the end of financial year 2017 - 2018 shows that our membership is poorer, more female and more ethnically diverse than the London average:

Relationship Between Poverty and Debt• People in poverty in 2000 tended to have debts

relative to their incomes 20% to 25% higher than the population as a whole.

• Borrowing by poor people can be justified by the fact that for most households of working age poverty is only temporary. 35 per cent of households in the sample were in poverty in at least one year between 1991 and 2002 but only 2.5 per cent of households were in poverty for ten years or more.

Source; Joseph Rowntree Foundation - Report on Long Term Relationship Between Poverty

and Debt

UK Personal Debt Statistics - January 2018Average Borrowing: The average total debt per household – including mortgages – was £57,578 in November. That’s an average debt per adult of £30,253 – which is about 113.8% of average earnings.

Consumer Credit Levels: Outstanding consumer credit lending was £205.8 Billion at the end of November 2017. This is up from £192.19 Billion at the end of November 2016, and is an increase of £259.24 for every adult in UK. This means average consumer credit borrowing per UK adult is now £3,719.

Credit Card Borrowing: Total credit card debt in November 2017 was £70 Billion. This is an average of £2,574 per household. This means at the average credit card interest rate it would take 26 years and 3 months to repay if you made the minimum repayments each month.

ACCORDING TO THE OFFICE FOR BUDGET RESPONSIBILITY’S NOVEMBER 2017 FORECAST, HOUSEHOLD DEBT IS PREDICTED TO REACH £2.296 TRILLION IN Q1 2022. THIS MAKES THE AVERAGE HOUSEHOLD DEBT £84,412.

County Court Judgements: 1,756 consumer County Court Judgements (CCJs) are issued every day, with an average value of £1,472.

Number of Personal Insolvencies: 277 people a day are declared insolvent or bankrupt. This is equivalent to one person every 5 minutes and 12 seconds.

Source: The Money Charity: Statistics January 2018

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GenderMale 35%

Female 65%

Ethnicity

White 37%

Other 12%

African 23%

Afro-Caribbean 19% Irish 5%Asian 4%

Housing Tenure

Home Owner (mortgaged) 21%

Rent (private) 20%

Housing Association 21%

Council Tenant 28%

Friends & Family 5%Other 5%

Retired 5% Other 3%

Unable to work (health) 4%Unemployed 5%Voluntary 1%

Self Employed 7%

Temp Contract 2%

Full Time Student 1%

Part Time Permanent 13%

Full Time Permanent 59%

Employment

25% of our membership live in homes with a TOTAL household income of less than £15k per annum

31% of our members

tell us that they are

lone parents

Don KehoeSecretary

I have lived and worked in Islington for over 30 years and, after being involved with the EC1 New Deal for Communities project, I wanted to volunteer for an

organisation that addressed the needs of my neighbourhood. My career in IT for a wide range of City of London institutions means I have had experience of business and finance, so London Capital Credit Union was an obvious choice with its emphasis on thrift and provision of affordable credit to local people. I am committed to the success of London Capital Credit Union, our credit union, and I am proud to serve as Secretary on the Board.I believe that our community is strongest when it is united and everyone has an equal chance and benefits fairly. Credit unions exemplify that because they are owned and run by members for members who share a common bond and any surplus or profits made in the year is shared between those who save with and borrow from the credit union.

Elisabetta BerteroMy involvement with the London Capital Credit Union (LCCU) started as a volunteer, helping with administrative

tasks in the office. I was then asked to rethink and streamline the training programme for volunteers, whose work is so valuable to the LCCU. I was co-opted to the Board in December 2018.I have been a Lecturer in Finance for over 25 years at the London School of Economics. I emphasise in my classes that while unregulated and “greedy” finance can do great harm, well-regulated and well-run financial institutions can be an important force for good. Organisations such as the LCCU, especially because run for the benefit of their members/owners, are important in harnessing finance to help improve people’s lives. It is a privilege to be involved.I hope to use my experience in finance to ensure that as a Board we help the LCCU continue to improve the services we offer our members. At its core, this means offering fair interest rates, opportunities to

PersonnelMartin GroombridgeChief Executive Officer

I have worked in my current role with London Capital Credit Union for over 10 years, having previously provided

consultancy services to a number of credit unions in London and the south east. My first business experience was in the consumer co-operative movement, and for many years I served as an elected a non-executive director of one of the UK’s largest co-operative retailers before taking paid employment in the sector.I have a wide range of business experience, and am driven by my desire to provide services that are run by and for our community. Since starting in my current role our credit union has grown at a phenomenal rate, being the fastest growing community credit union for many years running. In particular we have been successful in generating a profitable loan book assisting many thousands of people escape from debt and the poverty trap. With the help of deferred shares as an ethical investment I am committed to playing my part in ensuring that this growth continues to help hundreds of thousand more who need an ethical alternative provider in the financial services industry.

Mark BadcockTreasurer

I have worked with Islington Council as a qualified accountant for over 30 years. I live in Surrey, just outside London, and in my spare time I like reading,

walking and visiting places of interest. I helped set up a credit union for Islington Council employees nearly 20 years ago and served as Compliance Officer, Secretary, Vice President and President for this credit union between 2002 and 2007, prior to the establishment of the borough-wide credit union in 2007, when I was appointed Treasurer. What I like most about London Capital Credit Union is our friendly and helpful staff, volunteer and Board colleagues. I

also like the work we do in helping people manage and improve their finances, especially in the difficult circumstances that many of our members’ face, and our uniquely democratic and ethical nature.I am very pleased about the success of our credit union in recent years. I’ve seen us become one of the fastest growing credit unions in the UK, helping local people keep out of the clutches of high cost lenders and benefiting the local community. I’d urge anyone seeking ways to start saving, to get help with the costs of borrowing or looking for an ethical savings and investment alternative to join the credit union.

Helen BaronChair

For over 25 years I have been a resident of Haringey, Islington and now Barnet, which covers much of London Capital Credit Union’s common

bond, and I enjoy getting involved in the community. In my day job I am a psychologist and I work with organisations and people to help them find appropriate roles and work effectively.I have volunteered as Director and President of London Capital Credit Union since October 2007 and I am proud to have been involved in its phenomenal growth from a few hundred members to where we are today. We are providing fair financial services to people that want an ethical alternative and those who are often exploited by commercial firms. I see my responsibility as President to enable the Board to work effectively. The best part of the role is the opportunity it gives me to see directly how the credit union can impact on members’ lives.I believe that an accessible saving and loans facility is sorely needed, particularly in the current economic climate. The commercial financial sector often excludes or exploits people. A credit union like ours, which is a savings and loans co-operative, can provide the services and support its members want and need in a better way.

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save and a high standard of service. I have lived in London for over thirty years and love being part of such a diverse and culturally rich community. Serving as an LCCU Board member is an important way for me to participate in and contribute to our community.

Paul CampyI am an Islington resident and firmly believe in the important role a Credit Union can play, in providing affordable and accessible loans and savings

products where the market either ignores or excludes the community we cover through the level of charging. As a cooperative, we can truly tailor our services to our members and be a trusted, flexible and responsive financial organisation.As a member of the Board, I want to help ensure that we uphold those objectives, to remain a secure, sustainable, and going concern for future generations and to balance the needs of our savers and borrowers.My day job is with an IT services company with its UK base in London where I work in business development, helping new clients use IT to better deliver business outcomes. I also serve as a Trustee on a number of its pension schemes. I try to bring my commercial, financial and organisational skills to the board to scrutinise the Union’s operations, help to develop strategy and secure the Union’s future on your behalf.

Jonathan ColcloughIn my day job, I am a lawyer specialising in company and commercial law. I also worked for the Financial Conduct Authority,

the credit union’s regulator, for three years until the end of 2015.I have been involved with London Capital Credit Union since 2013, formerly as a member of the Supervisory Committee. I am involved because I support the principles of the credit union movement: people co-operating in their communities to create a democratic, ethical alternative to the banks.

James DarbyshireI am lawyer by training, working in the financial services regulatory sector, and I joined the Board of London Capital Credit Union in 2014. I believe I

am well placed to contribute fully to the legal, regulatory and compliance issues that the credit union has to face. I like to think that I also bring enthusiasm, dedication and good humour to the role!I wanted to join the credit union as I passionately believe it is a vital, ethical source of credit and savings for the whole community. I know that my savings, along with those of others, offer a critical alternative to payday loans and other forms of (what is often exploitative) lending provided by the commercial financial sector. By being on the Board, I am able to contribute to an organisation that makes such a vital difference to people’s lives in our community.London Capital Credit Union helps everyone in the community by promoting saving and by reducing the cost of credit. This is particularly helpful when someone’s finances are stretched, or if they have been excluded from financial services products altogether. By offering savings and loan products at very competitive rates, the credit union encourages its members to save even when they are borrowing.

Kathleen EganI have lived in Islington since 1980, when I worked in a childcare nursery. I saw lots of parents running up high cost debts using doorstep lenders

and so I started to think about credit unions as an alternative for people who were paying too much for credit.I joined the Board of Directors of London Capital Credit Union six years ago and I currently serve as Training Officer. My family background is Irish and in Ireland credit unions are very strong so I was aware of how they worked for local communities rather than just for profit.I got involved in the Board to provide support to staff and to ensure we are a good employer, offering decent pay and conditions. I enjoy the volunteer work on the Board, helping to plan the growth of the credit union and going to local meetings to promote our services. I am

proud to have played my part in creating one of the UK’s largest savings and loans co-operatives.

Elaine GreavesI was introduced to the credit union movement by my parents as a child, as my father was a founder member of Hornsey Co-operative Credit Union, which was set up in 1962.

This was the UK’s first credit union, formed by a group of new immigrants from the West Indies because there had been a lack of financial services for people new to the country. My father, Blair Greaves, served on the Board of Directors for all of the 50 years that this credit union was in existence and was President for over 25 years, up to the time of the merger with London Capital Credit Union. I joined the Board of London Capital Credit Union in 2014 and I am keen to follow in my father’s footsteps, promoting the credit union movement as a fair and more ethical source of financial services. I work for Islington Council, where I use the payroll deduction savings scheme. The credit union really helps me to save, and I know that my savings are there when I need them. It is good to know that our savings are providing a source of low cost loans for people in need.

Michael Mlilo-MabasoI have worked in health, law and finance for the last 15 years. I live in Kent just outside London. Whilst l have always known about Credit Unions, l only really

became involved through participating in my Employers Salary Savings Scheme. At that time, many large banks were pulling out of low-income communities and a lot of what are often known as alternative financial service providers i.e. the payday lenders, the check-cashing operations/pawn shops, were growing dramatically.This sense of a financial services injustice where marginalised groups and vulnerable individuals are often worst affected, deprived of access to affordable financing led me to want to be part of and participate in a movement that offered sustainable ethical lending to all and critically a savings culture.That’s why l hope to contribute to a well led Board that can offer appropriate checks and balances to the management of the credit union ensuring financial stability and a continuing adherence to the principles of the Credit Union.

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Be Part of Something Big

Our Future PlansOur plans for the future continue to be very ambitious. Given the social impact that we have, we want to continue to grow our credit union as we have done in the past 10 years. We aim to increase our membership from 15,000 to 30,000 and our loan book from £9.8m, to £20m by the end of 2019, with much more in future years.

We plan to deliver this growth by:• Encouraging more people to save with us by

offering competitive dividend rates on savings and providing schemes that allow people to save through salary deduction;

• Continuing to offer highly competitive market leading loan interest rates;

• Continuing to offer excellent quality service to our members;

• Strengthening our balance sheet to ensure that we are delivering sustainable growth in our community.

We are looking to offer more loans by creating new products such as revolving credit facilities and giving access to our services through aggregator websites such as Money Supermarket.

We wish to increase the percentage of our members who repay their loan by way of a payroll deduction scheme with their employer. Our experience and our analysis shows that deducting repayments at source significantly reduces the risk of a loan going wrong.

We want to increase our regulatory capital position. Regulators across the world are increasingly keen to ensure that financial institutions are robust in the face of possible future crises. We are also required to show that we have a balance sheet capable of withstanding financial stress. That means that if we want to grow we need to increase our regulatory capital.

What Will Your Investment Support?We aim to raise £1 million in additional capital through an issue of non-transferable deferred shares. This will allow the continuing expansion of our lending as an alternative to loan sharks and other high cost credit providers. A social investment in deferred shares will have a significant impact on the community that we serve.

The issue of deferred shares allows us to fulfil regulatory requirements by increasing our capital base, without either increasing the cost of credit to members or reducing lending to those who most benefit from our services but also form the highest risk group of borrowers.

The Social CaseA single investment in deferred shares provides ongoing benefits far beyond the amount invested. While we can raise loan capital through our members’ savings, there is a regulatory requirement to hold capital representing 10% of our assets. For example, an investment of £100,000 of deferred shares will allow us to release up to £1m to lend each year. With a typical loan repaid within a year the money can be lent out time and again multiplying its effect.

In 2013, analysts from a well-known City institution performed an assessment of the social and financial impact of our lending business. They concluded that on average for every pound that we lend to clear existing debts, our members save £1.25 each year in interest, bank charges and fees.

So the £100,000 of deferred shares allows £1m to be

lent and leads to £1.25m in benefits to members in a single year, and over four years our members could save some £5m of loan costs. This is money that is likely to be used within the community and therefore provide further benefit by supporting local business and creating local employment opportunities.

Deferred shares investment

Inc.Lending Capacity

Est. Min. Annual Social Impact

Est. Social Impact 5 Years

£50,000 £500,000 £625,000 £3,125,000

£100,000 £1,000,000 £1,250,000 £6,250,000

£250,000 £2,500,000 £3,125,000 £15,625,000

£500,000 £5,000,000 £6,250,000 £31,250,000

£1,000,000 £10,000,000 £12,500,000 £62,500,000

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Our Business Risk FactorsRisk Proximity Likelihood Impact MitigationReputational risk if we have to reduce lending to poorer sections of society to maintain capital ratios.

Close Medium risk Low financial risk.

High reputational risk.

Ensure that capital is raised through deferred shares, sub-ordinated loans and improved retained surplus.

Ability to continue lending to the full range of membership, including those on low incomes

Close High risk Low financial risk.

High reputational risk.

Further diversify our membership into higher-income brackets, via new “Homeowner Loan” offered to lower-risk borrowers, increasing retained surplus and capital. Increased focus on members in paid employment, particularly using our Salary Savings Schemes.

Loan defaults Becoming less likely as employment rates and wages start to rise and marketing activity more focused on lower risk borrowers.

Medium risk Increase the proportion of borrowers who repay by Salary Savings Schemes.

Regulatory risk Close Medium risk Critical We will keep regulators informed of progress towards increasing capital and ensure full compliance with all regulatory requirements.

Capital ratio requirement, to ensure robustness

Close High Critical This offer of deferred shares, sub-ordinated loans from local authorities and increased retained surplus by boosting sales and minimising costs.

Key person risk Not close Medium High risk We will ensure that pay and conditions are maintained at levels to retain staff. We will plan for succession of key staff and ensure staffing structures are designed to encourage knowledge sharing.

page 9

The Investment Offer DetailsInvitation to InvestShares allotted: 1,000,000 of £1 each share subject to a minimum purchase of 10,000 shares. Open Offer

Share Type: Deferred ShareA deferred share is not a conventional financial investment, but rather a dividend paying social investment designed to bolster the regulatory capital of our credit union and enable us to increase our lending activity to our members who need it.

A Deferred Share:• is essentially perpetual and can only be redeemed/

withdrawn in the very limited circumstances set out at section 31A of the Credit Unions Act 1975 (with the consent of the regulator or, if the credit union is wound up or dissolved, when all other creditors have been paid, including non-deferred shareholders);

• ranks below all other liabilities in the event of insolvency of the credit union which issues it;

• carries, for its holder, a right to exercise a single vote in a general meeting of the credit union irrespective of how many deferred and/or non-deferred shares the holder owns;

• Deferred shares are normally transferable between members of the credit union which issues it, but London Capital’s deferred shares are non-transferrable. Any secondary market in deferred shares are likely to be highly illiquid given the size of individual credit unions and the nature of the financial instrument.

Our deferred shares will be non-interest bearing. The effective interest paid to holders of our deferred shares, by way of dividend, will be at the discretion of our membership as a whole and is determined by the levels of annual surplus. The Board proposes to pay the same dividend to deferred shareholders as we pay to our ordinary members. For information, we have paid the following dividend in recent years:

Year Dividend on Adult Savings

Loan Interest Rebate

2012-13 2% 2%

2013-14 1.2% 1.2%

2014-15 0.75% 0.75%

2015-16 0.75% 1%

2016-17 *0% *0%

2017-18 *0% *0%

*Our continued trading surplus was all added to reserves to strengthen capital asset ratio

Dividend rates have moved in line with market rates on instant access savings accounts, and to limit large value deposits and flight capital.

You should not invest in deferred shares if you are purely seeking a financial return. An investment in deferred shares is more akin to a permanent social investment or donation, restricted in use to provide capital in order to allow the credit union to continue to increase its levels of lending to those who need it most.

Before considering investing you should be aware that:• All of the capital invested is at risk;• Income or distribution payments are entirely

discretionary;• The instrument is perpetual and will probably be

illiquid;• Investing more than 10% of the net investable

portfolio in this type of instrument is unlikely to be in your best interests:

Note that deferred share investments are not protected by the Financial Services Compensation Scheme.

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Who Can Invest?Only members of the credit union, corporate or individual, can invest in deferred shares. Only companies or individuals who are classified by the Financial Conduct Authority as professional and eligible counterparty clients, certified sophisticated retail investors, self-certified sophisticated investors or certified high net worth investors can invest. This is because deferred shares are not, in our view, suitable for ordinary retail investors. Corporate bodies must have some kind of physical base within our trading area of the City of London, or as set out below. Individuals can also purchase deferred shares if they live OR work in:

JOIN UShttps://www.credit-union.coop/content.

asp?section=250

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The credit union has helped me to pay for an essential train

season ticket for travel to work, making my very expensive travel

a little cheaper. Previously I had had to borrow from a high

interest lender, but this was escalating out of control. The credit union has helped me to

bring debts under control.

I save with London Capital Credit Union as I hope that my savings will help prevent people

going to payday lenders.

I was taking out payday loans as an only source of borrowing

money due to my bad credit history, but the credit union has helped get me out of the

cycle of extremely high interest payments.

• Barnet• Brent• Camden• City of London• Enfield

• Hackney• Haringey• Islington• Waltham Forest

or comply with one of our other membership criteria, such as being a member of The Co-op in London or the South East Region. A full list of our membership criteria can be found at our website. www.credit-union.coop/content.asp?section=250

How Much Can You Invest?You should not invest more than you can afford to lose. Shares are issued at a fixed price of £1 each. We cannot accept an investment of more than £180,000 or less than £10,000 in deferred shares from any single person or organisation. This should be considered a social investment rather than a traditional financial investment. You should be assured that your investment will bring lasting improvements to the lives of many people living and working in some of the poorest areas of the capital.

How to InvestTo invest you should complete an application form which is available upon request. Your application will be subject to normal ‘know your customer’ regulatory checks. Details of how to transfer funds will be provided and a share certificate issued upon receipt of the investment.

Deferred Shares Risk StatementThe investment to which this communication relates is a deferred share. Direct investment in deferred shares can be high risk and is very different to investment in deposit accounts or other savings products. In particular, you should note that:

(a) the entire amount you pay for the deferred share is at risk;

(b) the sum you pay is only repayable to you in limited circumstances, specifically if:

i. the credit union has obtained specific regulatory permission to make the repayment; or

ii. the credit union is wound up, and there are funds remaining after all creditors, including savers and holders of subordinated debt, have been repaid;

(c) the sum you pay for deferred shares is not covered by the Financial Services Compensation Scheme;

(d) a deferred share may only be sold to a member of the same credit union and may be difficult to sell on; and

(e) investing more than 10% of your savings or net investment portfolio in deferred shares issued by a credit union, credit union subordinated debt and mutual society shares is unlikely to be in your best interests

Expression of InterestPlease note that any applicant must be either an individual or corporate member of London

Capital Credit Union Limited (“The credit union”). A minimum of £20 deposit should be made to open the share account, and must be included in addition to the payment for deferred

shares.

To receive further information and an application pack for this ethical investment opportunity please email us at info@credit-union.coop or write to us at :

Credit UnionJeremy Hopgood Rooms

Caxton House129 St John’s WayLondon N19 3RQ

If you would like to discuss the matter please contact our CEO to schedule a meeting.Telephone on 020 7561 1786 or email us at CEO@Credit-union.coop.

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London Capital Credit Union LtdReg. Office: Jeremy Hopgood Rooms, Caxton House,

129 St John’s Way, Archway, London, N19 3RQ

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Firm Ref. No. 214094

London Capital Credit Unionthe savings & loans co-operative