The Welsh Government is committing additional funding to contribute to further cost of living intervention, as it looks to back credit unions and their ethical financial lending.
A boost of £600,000 is being allocated to credit unions, as part of a push to promote their ethical and affordable lending practices to anybody who is struggling through the cost of living crisis. Unions’ track record of building financial resilience for those who are more financially vulnerable is being supported as they are not-for-profit and are not owned by external investors or shareholders. They are also more responsible and affordable, whilst also contributing to the economy, in comparison to loan sharks or doorstep lenders that look to capitalise on the financial vulnerability of those struggling through the crisis.
Jane Hutt, Welsh Minister for Social Security, said:
“Welsh credit unions work incredibly hard in support of our journey to promote social justice and tackle poverty across Wales.
“Their services have been – and continue to be – vital to people suffering financial difficulties during this unprecedented cost of living crisis. I’d like to thank them for their commitment to providing access to fair and affordable credit.
“I would urge those struggling who may be at risk from high interest doorstep lenders or loan sharks to instead turn to their local credit union, which can provide access to fair and affordable credit.”
Upgrades being funded through the allocation will go towards making the unions more attractive to people who need to use credit union loans, whilst also complimenting digital transformation projects. An example of how this can be done is through the utilisation of digital services to provide a genuine alternative to high-cost lenders that might otherwise be considered.
This funding will be boosting the cost of living measures introduced by the Welsh Government in 2022, as it looks to provide further support to those who are struggling due to poor credit histories, whilst also backing up the plethora of ways that the government is providing targeted support to those in the most need.