This item was published during the term of a previous administration that ended in April 2007
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Funding for credit unions
03/09/2003
A funding boost - worth over one
million pounds - to help credit unions target the 13
percent of Scots who currently cannot access basic banking
services was launched today by the Executive.
This new 'Capacity Fund' will help
existing credit unions to:
· Raise their profile in
communities - such as securing prominent shop premises
· Expand their membership so
that at least five percent of all Scots are credit union
members by 2005
· Expand the services they offer
- this could include services such as money and budgeting
advice or schemes targeting young people to encourage
healthy ways of spending and saving
Deputy Communities Minister Mary
Mulligan launched the fund during a visit to Pollok Credit
Union in Glasgow - the fastest growing credit union in the
UK.
Mary Mulligan said: "It's shocking
that nearly 13 percent of Scots don't have access to a
basic bank account - that's higher than the rest of Britain
and it's not acceptable. Financial exclusion fuels the
cycle of poverty.
"We want to develop credit unions so
that they are more sustainable because their services are
critical in helping to tackle disadvantage. Credit unions
provide an alternative to mainstream banking for people on
low incomes or those excluded from financial services.
"This fund targets credit unions that
have the potential to significantly raise their membership
levels and extend their services. I've come to Pollok
because this is a great example of a union that has seen
the opportunities and gone for them. It's a well run
business and one that others should aspire to."
Shaun Spiers, Chief Executive of the
Association of British Credit Unions Ltd (ABCUL) said: "The
Executive's support has already made a significant
contribution to Scottish credit unions and their members. I
am delighted that they will be extending this valuable
support. And that they have made this announcement at
Pollok, which is probably the fastest growing credit union
in Britain. Pollok have done tremendous work to bring first
class, affordable financial services to its community."
This funding totals 1.1m pounds:
650,000 is new money and 450,000 was announced previously
(as part of the 1.5m pounds 'Unlocking the Potential'
Action Plan). Funding will be allocated as follows: 200,000
pounds during 2003/04, 400,000 pounds during 2004/05 and
500,000 during 2005/06.
Credit unions representatives who wish
to apply for the fund should contact: 0131 244 0064.
Compulsory criteria for the fund:
· The applicant must be an
established Scottish credit union (no study groups or
feasibility studies for new credit unions)
· The credit union must be 100%
FSA compliant
· The application must be for
between 10,000 and 60,000 pounds
· State Aids Regulations must
not be exceeded by this award
· The credit union must have no
fewer than 1000 existing members (unless there is clear
evidence of a significant membership increase within its
own capacity) and no greater than 5000 members
· The application must be for a
project which: aims to significantly increase the capacity
of the credit union for example by increasing membership
numbers or improving services; demonstrates that there is
potential members within the credit union's common bond to
achieve this, or that the proposal is to widen the common
bond, and;
includes a plan to sustain this development
following this three year funding.
An EC directive sets the limit at
100,000 euro or 62,000 pounds over a three year period on
state aid for credit unions. The Executive are currently
making a case to the EC that public support for credit
unions should not constitute state aid because of the work
they do to tackle financial exclusion. It hopes to receive
a resolution by the end of the year from the EC.