The Lloyds Banking Group has revealed detail of a new four-year plan aimed at supporting credit unions. The Association of British Credit Unions (ABCUL) commented that the growing sector could provide ethical and responsible alternatives for consumers.
The Lloyds package was announced to coincide with the 50th anniversary for credit unions. Economic secretary Andrea Leadsom described the announcement as a “welcome boost” to the credit union movement, allowing the sector to serve more communities.
Matt Young, group corporate affairs director for Lloyds Banking Group, said, “Our overall aim is very simple. We want to enable as many people as possible to access and benefit from financial services. We see this as a key part of being a responsible business and helping Britain to prosper.”
The plan consists of four elements, including the launch of a £4m fund, which over a four-year period will assist credit union in strengthening their financial position by enabling to grow sustainably and build resilience.
It will also see more customers being signposted to credit unions, sharing of expertise and collaboration between the bank and sector.
Minister for welfare reform Lord Freud said he hoped other banks would follow suit and partner with credit unions. He added, “Credit unions can offer exceptionally high quality financial products that can help prevent people from getting into crippling debt by offering safe loans.”
ABCUL explained that credit unions offer chance to diversify the finance market whilst making it more ethical and responsible.
Mark Lyonette, chief executive of ABCUL, commented, “As is demonstrated in countries like the US and Canada where more than 40% of people use credit unions, the British sector has great potential to provide an ethical financial option and provide healthy competition in financial services.
“This can be through providing an affordable and responsible alternative to payday and other high cost lenders or providing great value loans and savings without the need to pay a return to shareholders.”
Photo: Lloyds Banking Group