AN UNDER-THREAT credit union offering a financial helpline to more than 400 people in Blackbird Leys could be saved by talks of a new merger.

The credit union, based at Blackbird Leys Community Centre, had faced closure after a proposed merger with the larger Oxfordshire Credit Union fell through earlier this year.

But a new merger with Northamptonshire Credit Union, which now operates in Banbury and Kidlington, could be on the cards – only if the Blackbird Leys service can keep its branch.

Treasurer Jim Hewitt said the merger with OCU had collapsed because the proposals meant their long-running presence in the community would be lost.

The 72-year-old said: "It was becoming clear that we weren't going to be able to keep the branch under the merger and it was all going to be done online and over the phone.

"It's important for us and our members to have a presence in the community and losing the branch wasn't an option for us.

"We are looking into a merger with Northamptonshire Credit Union at the moment and again it's a question of being able to keep the branch open.

He added: "I am very hopeful at the moment, all the signs are positive and the discussions are going well."

The credit union, which offers low-cost loans of between £500 and £2,000 to people in Blackbird Leys and Greater Leys, was dealt a big blow by Oxford City Council when it refused to give the service any of a requested £10,000 grant.

The council's finance panel said it was "very concerned" about the lack of sustainability in the organisation, which has been running for more than 20 years.

The same panel met last week to discuss an evaluation report into the financial situation of both Blackbird Leys Credit Union and Oxfordshire Credit Union.

The report revealed BLCU's assets had dropped 11 per cent over the last three years, its saving deposits were down seven per cent and its lending levels had plummeted by 68 per cent to under £20,000 out on loan on its books.

A number of actions were set out for BLCU to take on board but Mr Hewitt, who was awarded an MBE in 2012 for services to financial inclusion in Oxfordshire and to the local community, said a merger was the only option.

He said: "We would have to merge with somebody and if we couldn't find a merger we would have to scale right back and operate on a shoestring.

"The other option would be to talk to members about their options and which credit unions they might be able to switch to.

"But we are positive over a potential merger with Northamptonshire and very hopeful for the future."