The study argues that there is a compelling case for a move away "from an atomistic business model to one based on collaboration and shared services." That synergy will also maintain "the community finance ethos and vision that defines and differentiates it from the mainstream," Jones said.

Throughout London, credit unions are working in partnership with statutory, voluntary and community organizations such as housing providers, money and debt advice agencies, job centers, libraries and churches among others. In the past, partners were often supporters of fledgling credit unions that they assisted with premises, grants and access to services in order to help them grow as viable community-based organizations, according to the report. Now, there is an expectation that credit unions would not be just the recipients of support but rather would be active participants in mutually beneficial initiatives and programs.

Credit unions are operating in 29 London boroughs and in nearly every case, there is some

level of engagement with the local authority, according to the data. In over 20 boroughs, credit unions services are offered to local authority staff through the support of payroll deduction agreements.

In conducting interviews with representatives at some of London's credit unions, Jones said many said they were confident in alliances with local government that would help fight poverty and build strong communities. The need is urgent given that 39% of children in London live below the poverty line. Affordable financial services, financial education and unemployment have become key priorities.

"Access to an affordable loan can sometimes be a factor that supports transition into work and even makes it possible," the report read.

While credit unions fit with an agenda around widening access to financial services, there is a broader dimension to local authority interest in credit unions. Jones wrote that the financial institutions exemplify a commitment to "Big Society," which is defined as "what happens whenever people work together for the common good. It is about achieving our collective goals in ways that are more diverse, more local and more personal."

Still, even though London's credit unions have the potential to make significant contributions to society, the authors noted inconsistencies in organizational strength and capacity were found. One local official said "Even though a lot are, there are just too many credit unions not fit for purpose. They are too small and under-capitalized."

"Where credit unions are strong, or display real entrepreneurial spirit, local authorities regard them as key partners and often have offered significant support; where they are weak and lacking in vision, some local authorities are less well disposed to supporting their development," according to the study.

To build a stronger collaborative model, the report listed several suggestions based on feedback from local authorities including having a consistent identity in message and brand image and being more visible in London by adopting a social marketing approach which focuses on social as well as economic goals.

Having stronger boards of directors, hiring managers with higher level management skills and focusing on "long-term continuity beyond any current dependence on individual personalities" were other recommendations. While mergers could help achieve economies of scale, credit unions should still strive to keep their local identity, Jones wrote. Enhanced delivery channels such as information technology upgrades and more economically diverse memberships could also aid in building stronger collaborations.

"Credit unions should recognize, in common with many credit union movements worldwide, that long-term success in expanding access to affordable credit union financial services depends on the development of a collaborative credit union system," the report read. "Collaboration not only improves performance, efficiency and standardization in quality of service, it safeguards diversity and localism in credit union services."