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New credit union fund
12/01/2009
A fund to help credit unions grow and weather the global downturn has been launched by the Scottish Government, John Swinney announced today.
The £250,000 scheme, to be delivered as part of the new Third Sector Enterprise Fund, will offer grants of up to £25,000, helping credit unions - financial co-operatives owned and controlled by their members - build capacity and become more sustainable organisations.
Mr Swinney, Cabinet Secretary for Finance and Sustainable Growth, said:
"We recognise that Third Sector organisations, including credit unions, face challenges as a result of global economic difficulties. The Scottish Government highly values the contribution the sector can make to creating a wealthier and fairer country - which is why we increased funding by 37 per cent and recently launched the Third Sector Enterprise Fund.
"At a time when many people are feeling the effects of global conditions, it is even more important that we utilise the Third Sector's contribution towards increasing sustainable economic growth to help Scotland emerge stronger from the downturn.
"We have put increasing advice and support to businesses and individuals at the heart of our economic recovery programme and the Third Sector Credit Union Fund will help credit unions, in these uncertain times, grow their capacity to operate in a more enterprising and sustainable way."
The Scottish Government has worked with Green MSPs to develop the new fund. Patrick Harvie MSP said:
"I'm delighted to have been able to work with the Scottish Government to help develop the Third Sector Credit Union Fund. Credit unions have the good Scottish values of co-operation and social enterprise at their heart, and their work significantly strengthens the communities they operate in.
"In these unstable economic times, with other sources of borrowing harder than ever to obtain, the credit union movement offers a refreshing, human scale alternative source of finance. This new funding will be a very welcome boost for Scotland's credit unions, which could be a key part of a truly diverse and sustainable banking system, instead of the UK Government's vision of a world dominated by a handful of megabanks."
Credit unions are financial co-operatives operating in the Third Sector and wholly owned by their members. Many are community-based, offering savings and loans, as well as current accounts. It is estimated that there are around 120 credit unions in Scotland, with more than 200,000 members.
Scottish credit unions are eligible to apply for support from the Scottish Government's Third Sector Enterprise Fund and Scottish Investment Fund. However, it has now been decided to create a dedicated £250,000 Third Sector Credit Union Fund to help credit unions build their capacity, capability and financial sustainability. This will help them reach their potential and make a key contribution to achieving the Scottish Government's national outcomes.
A total of £250,000 will be invested from 2008-09 to 2010-11. The Scottish Government will offer funding of up to £25,000 for Credit Unions based on an assessment of an application form, current business plan and social outcomes. The Scottish Government's minimum investment will be £2,500. It is envisaged that there will be around 20 grants over the period 2008-2011.
For more information, interested credit unions can telephone 0141 305 4176.