Credit unions are often hypothesised to be less vulnerable to crises than other types of businesses.This paper examines the impact of the cost-of-living crisis on the British credit union and communitylender sector drawing on interviews with 25 managers and a focus group with four loan officers. Thiscrisis is affecting businesses and households through high inflation, declining real pay, rising interestrates, and falling economic growth. The findings suggest that credit union and community lendercustomers are experiencing a deterioration in their finances. They save less, have more unsecureddebts, are less likely to qualify for a loan, and are more likely to default on loan payments. Lenders aregrappling with a tension between supporting customers affected by the crisis and preserving their ownfinancial position. On the one hand, there is evidence of lenders providing additional support to theirmembers, including emergency loans and hardship payments. On the other, they are mitigating therisks of deteriorating customer finances by tightening lending criteria and reducing lending to higherrisk groups. The findings underline the need for future research into the long-term effects on the sectorand its ability to provide finance to underserved communities
