ABCUL reacts to Government’s plan to create new organisation for financial inclusion
17 Aug 18
As part of its Civil Society Strategy published last week Government announced that it will create a new independent organisation to use the £55 million pounds allocated from the Dormant Accounts Scheme for financial inclusion. The aim of this organisation will be to bring in co-funding in the form of grants and investments from a wide range of groups including the private sector.
ABCUL’s Head of Policy and Communications, Matt Bland said:
“ABCUL was pleased to see the Government’s announcement in its Civil Society Strategy this week of its intention to use £55 million of dormant assets money for the creation of a new financial inclusion organisation dedicated to capitalising and expanding the affordable credit sector. Bank of England data published last week showed that credit unions had outstanding lending balances at 30 September 2017 of almost £850 million making them, by some significant distance, the most active providers of affordable, ethical lending to excluded households in the country. Evidence from the Lloyds Banking Group Credit Union Development Fund delivered by ABCUL’s sister charity, the Credit Union Foundation, shows that capitalisation of ambitious credit unions can generate many times the investment made in new lending.
“With recent ONS figures showing the scale of household indebtedness reaching record levels and the recent rise in the Bank of England base rate, many families are under significant pressure to make ends meet with credit filling the hole. Credit unions’ affordable interest rates, encouragement of saving and support with developing budgeting skills provide a much needed boost to the financial resilience of households making them less dependent on high-interest debt and better able to weather the inevitable financial shocks which occur from time to time while helping families afford their dreams and aspirations.
“We look forward to working with the Department for Culture, Media & Sport, Big Lottery and a range of stakeholders to ensure that the new organisation gets off to a flying start and maximises its impact in boosting the financial inclusion and capability of the country.”