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Welsh Government - Refreshing the Financial Inclusion Strategy 2016


We welcome the revision of the 2009 Financial Inclusion Strategy (FIS) and support the vision set out for everyone living in Wales to have access to appropriate and affordable financial services, be supported by quality assured information and advice services, and have the financial capability and motivation to benefit from the financial services available to them.

We also support the prominent role set out for credit unions. As detailed below, credit unions have a proven track record of delivering the Welsh Government’s financial inclusion goals, and are doing more now than ever before.

The basis and ethos of the credit union movement – not for profit, not for charity but for service – make it uniquely positioned to act in this area. Overwhelming international evidence demonstrates that the credit union model of delivering fair, secure and good value financial products through a not-for-profit cooperative structure works. The challenge is to ensure that all Welsh credit unions are financially sustainable and able to grow sufficiently in order to make a greater contribution towards a more financially inclusive society.

Key points

  • Credit union membership in Wales has risen from 10,000 in 2000 to 72,000 in 2014. The value of loans being made by credit unions more than doubled from £8m in 2004 to £18m in 2014.

  • According to Welsh Government figures, credit unions in Wales made over 12,000 loans with a combined value in excess of £9.2m to the financially excluded between April 2014 and June 2015.

  • Independent evaluation found that credit unions far exceeded Government targets for supporting the financially excluded. During the period measured they supported 23,052 individuals against a target of 7,500.

  • However, that success was built on a model of Government funding support that is no longer considered sustainable. While some credit unions are sustainable, existing funding has not produced a national network of financially sustainable credit unions. The refreshed Strategy does not address this issue.

  • If the vision set out in the Strategy is to be realised then the Welsh Government must help to create a sustainable and expanded Welsh credit union sector. This will mean replacing the previous model of revenue funding with strategic investment in credit union resources and capacity building, and supporting the Welsh credit union movement as it seeks to implement its first national credit union strategy.

  • Many credit unions have undertaken extensive financial inclusion work in schools, prisons and with the homeless, and have absorbed the costs involved in doing so. With revenue funding being withdrawn in 2017 some of these credit unions will be re-evaluating the affordability of such schemes against the necessity of being financially sustainable. In order to protect the good work that is being done, the Welsh Government should work with credit unions to agree a new framework to provide targeted support for these projects in line with measurable outcomes.

  • We welcome the commitment to work with credit unions on promoting payroll savings.

  • The Welsh Government should work with credit unions and other stakeholders to support the development of budget and jam jar accounts.

  • The proposed strategy lacks a framework for evaluation and measuring success. The Financial Inclusion Development Group should be tasked with developing one. 

The full consultation response is available to download on the right-hand side