PRESENTATIONPRESENTATION

The Logistics GuildCredit Union

The Logistics Guild is developing a Credit Union specifically

for people who work in the UK Logistics Sector.

Every credit union has a membership test which determines who can become a member.

Being a part of the Logistics Guild, members will have the right to join the Logistics Guild

Credit Union and take advantage of its ethical product range including savings products,

ISAs, current accounts and loans.

Loans can be for personal training, learning and career development and other purposes.

The money deposited by savers helps provide fellow members with access to loans.

As a not-for-profit financial cooperative, the income made from the interest charged

on these loans pays savers interest and some surplus profit may be used to fund

educational bursaries.

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The credit union concept has the support of Skills for Logistics, the

UK government and leading employers within the logistics industry.

Logistics employees can access the credit union by being members of the Logistics Guild.

The Guild offers training and development programmes, member benefits (e.g. discounts at

retailers) as well as the chance to join the credit union. Guild membership is free.

Employees can borrow loans from the credit union at rates below those offered by

banks, building societies, Wonga and other doorstep lenders. Loans are unsecured.

The Logistics Guild Credit Union’s (LGCU) lending rates are lower because it is a not-for-profit,

ethical lender which is owned by its members (corporate and individual).

The UK Government (Department of Business, Innovation and Skills through the UK

Commission for Education and Skills) has already committed £1.29m and major logistics

corporates have provided £600,000 of capital. THE LGCU will be regulated by the FCA/PRA

and retail deposits will be protected by the FSCS scheme up to £85,000.

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Logistics in the UK employs over 2 million people but many of

these people are young and low paid.

Government research shows that literacy and numeracy is low in the sector.

The Government is keen to promote credit unions as research shows too many people on low

incomes are paying too much in bank charges.

Moreover, banks and building societies have largely withdrawn from personal lending leaving

many people dependent upon pay day loan companies, doorstep lenders and companies like

Wonga.com who charge between 1,500 and 4,000% p.a.

Whilst loans may be used for any purpose, the LGCU will be promoting their use for

training courses, helping workers to improve their career prospects, raise their self esteem

and take responsibility for improving their career outlook.

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For employers, including LGCU

loans in their training programme

could:

o Increase the number of apprentices (18+ yrs)

where there is low or no Government funding.

o Alleviate the pressure on training budgets and

increase the scope of what can be offered.

o Increase productivity where research shows

productivity gains outstrip wage increases.

o Improve staff retention. If staff leave the

employer, they take the loan with them.

o Help improve job satisfaction, lowering rates of

absenteeism and recruitment costs.

o An employer may have a balance sheet

cap on what it can lend on employee loans

but the LGCU has no cap on the number

of loans lent.

o Employers may want to expand their

social inclusion strategy to help the

long term unemployed and address

high youth unemployment.

o Larger employers may wish to offer development opportunities to their subcontractors where individuals in these companies could take out training loans.

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Increased training activity provides more

skilled workers for the future and improves

the reputation of your company.

Specific logistics qualifications such as:

o Pre-employment training.

o LGVs: Practical and theory tests.

o Logistics Certificates and Diplomas.

o 2nd degrees and MBAs in Logistics Supply

Chain, International Trade and Transportation.

o Shipping Certificates and Diplomas.

o 2nd degrees in Maritime Business, Ship &

Port Management and the Environment and

Shipping Logistics.

o CIPS Procurement and Supply Chain Qualifications.

o Operations and Business Management.

o Humanitarian Logistics

The LGCU will work with a broad range of

training providers and professional bodies

across Great Britain.

LGCU loans can be made for

pre-employment training* or to

apprentices or employees looking to

upskill and develop their careers.

Loans can be made for specific training in

logistics or any work related field such as HR,

accountancy, finance, procurement, Health and

Safety etc.

Loans can also be offered for everyday items

such as buying a car to get to work, washing

machines, school uniforms or family holidays.

Importantly, loans can be made where

there is no Government funding and

where banks are reluctant to lend.

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*As part of an approved scheme

The LGCU’s products are fairer to

the employees than those of a bank

or doorstep lender.

o Products have no arrangement fees or early

settlement charges.

o Life cover to repay loans is offered at no

extra cost.

o CUs actively encourage saving and offer

information on how to budget finances

o CUs are more reasonable in their

negotiations with individuals when they get

into arrears, looking to help them resolve their

financial difficulties rather than see them as

a profit opportunity.

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Typically, the Sector operates on low

margins. To develop and fully realise

career potential, the LGCU can offer

real benefits and opportunities.

Market research* tells us:

o 60% of the workforce are under the age of 34

and 57% do not own their own homes.

o 65% of regular savers and 71% of irregular

savers would consider opening a savings account

with the LGCU, subject to competitive rates.

o 30% of employees expect to take out a loan

in the next 12 months for up to £2,000 with

repayments over 3 years.

* Survey by Logistiqa on 30 logistics companies.

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We are asking prospective Sponsors to

provide one or more of the following:

o Make a gift to help with the LGCU’s capitalisation.

o Provide subordinated debt or equity where you

would receive a market return on your investment.

o Provide senior loans or deposits at competitive

market rates to fund the LGCU.

o Permit access to your employees and/or

your subcontractors to promote the LGCU

and it’s benefits.

o Allow payroll deduction for your own employees

who wish to take out loans.

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As a founding member of the LGCU, a sponsor will enable its own

employees and those of its subcontractors to borrow funds for training

(and other purposes).

A sponsor will demonstrate social responsibility by supporting an important new initiative which

helps protect lower paid logistics workers from financial exploitation by high interest rate lenders

and improves access to education by creating bursaries.

Governance of the highest standard is ensured through professional credit union staff, an

industry board, monthly reviews and reporting to SfL and the UKCES and supervision by the

regulatory authorities.

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The content of this presentation is issued and approved by Promethion Limited

(“Promethion”) which is authorised and regulated by the Financial Conduct Authority

(the “FCA”) for the provision of investment advice to persons who can be categorised, in

accordance with the FCA’s rules, as “professional clients” and “eligible counter parties”.

The Firm does not provide investment services to retail clients and such persons should

not seek to use or rely on any information provided in this presentation.

The information contained herein does not constitute an offer to sell or the solicitation of any

offer to buy or sell securities and or any derivatives and may not be reproduced, further

distributed or published by any recipient without prior permission from Promethion.

The information and opinions contained in this presentation are for background purposes only

and do not purport to be full or complete. Nor does any content within this presentation

constitute investment advice. No representation, warranty, or undertaking, express or limited is

given as to the accuracy or completeness of the information or opinions contained in this

document by any of Promethion, its directors or employees and no liability is accepted by such

persons for the accuracy or completeness of any information or opinions.

Promethion is not registered as an investment advisor with the SEC and therefore this

document is neither directed at nor intended for US investors.

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How a Credit Union will benefitLogistic Guild Members

Zoe Shaw, Managing Director of

Promethion Ltd, the company behind the

new Logistics Guild Credit Union (LGCU)

explains how the new credit union will

benefit Logistics Guild Members.

What will the main outcome of the LGCU be?

Like all credit unions it will be a not-for-profit financial cooperative

owned and controlled by its members. We hope that people will be able

to use the credit union to take out small loans to fund training, which will

help further their careers, as well as being able to take out loans for

household items.

What does this mean for businesses?

So far some major logistics employers and trade associations have pledged

to support the LGCU. Next we need to secure additional funding. Employers

are an integral part of moving forward and a lasting solution. Employers can

also be represented on the LGCU board which will protect the interests of

both employer and employee.

So who can use the LGCU?

To use the LGCU you will have to be either working or training within the

Logistics Sector. In addition to this you have to become a member of the

Logistics Guild. To register for this is absolutely free. Being a member of a

credit union for your industry ensures that your interests are specifically

looked after. The financial support offered by the LGCU include; better rates

for savings, loans and information on financial best practice, free life

insurance on loans, Christmas clubs and savings schemes. The philosophy

behind this credit union is to help people.

I hear that credit unions are “ethical lenders” what does this mean?

Credit Unions are controlled by law with respect to how much interest they

can charge (a maximum currently of 2 % per month). They often charge less

than this and lend at rates more competitive than credit cards and much less

than doorstep lenders and payday loan companies. As credit unions are not-

for-profit organisations, any profit made by the credit union after expenses at

the end of their financial year may then be paid back to the members in the

form of an annual dividend on their savings.

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What is the philosophy of a Credit Union?

Credit unions believe in “people helping people” and are often run partly by

volunteers. When borrowers are unable to repay in a timely manner they try to

help people to get out of their debts rather than seeing people as a profit

opportunity. However, they are commercial and must make a profit and will

not lend without making credit checks.

Why save with the LGCU?

Through convenient and simple payroll deduction you can make monthly or

one off lump sum deposits into savings accounts which have competitive

returns. These accounts offer instant access and online account

management. Any loan you take out will be protected by ‘free’ life insurance

so that if you die the loan will be paid off in full and not represent a problem for

your family.

Is my money protected in a Credit Union?

Yes it is protected by the Financial Services Compensation Scheme which

provides 100% protection for up to £85,000 shares per individual member or

junior’s savings just as with a UK bank or building society. The LGCU will be

regulated by the Prudential Regulatory Authority (“PRA”) , subject to Money

Laundering Regulations and registered under the Data Protection Act to

ensure members’ information is kept confidential.

What amounts can people borrow and on what terms?

We will be offering loans for between £1,500 and £5,000 for 3 years – there is

very little interest from clearers to lend these smaller amounts. We hope after

a few months to offer a payday loan product with very competitive terms in

comparison to entities such as Wonga.com for amounts of £500.

What other products will the credit union offer?

The LGCU’s core product range will include regular savings products

(ordinary share accounts and ISASs) and unsecured loans. Other lending

products may subsequently be developed as the membership grows,

including pre-paid debit cards. We will also look to offer insurance and vehicle

finance in partnership with major providers in due course and offer a lottery to

raise money to train members.

Will there be a branch network?

The services will be delivered through a modern internet platform with

telephone and mobile banking options. It is believed this is appropriate for a

younger client-base which may be on the move and does not want an

inflexible branch-based structure. Given the projected geographical spread

of members across the UK this is the most practical arrangement.

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How will you actually market to our staff?

We will work with HR teams to design the best approach which suites their

organisation. This could include articles in in-house magazines, email contact,

banners on pay roles advertising the LGCU’s loans and trade and internet

advertising. In the longer term a designated in house contact person could

act as a focal point for members on a volunteer basis.

Why have I not heard much about credit unions before?

The UK is an under developed market for credit unions. By comparison,

in North America 45% of the US and Canadian population bank with credit

unions, 65% in Northern and Southern Ireland and 40% in Poland. The UK

Government is keen to encourage the growth of credit unions in the UK and is

working with the trade body, ABCUL, to promote saving and lending through

credit unions.

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