21 credit unions share £1m from Lloyds
25 Jan 16
Lloyds Banking Group has awarded £1 million to 21 credit unions across the country through their Credit Union Development Fund.
The 2015 awards are the second £1 million tranche of funding for the sector released from Lloyds’ £4 million, four year commitment to supporting credit unions.
Over the four year period from 2014 until 2017, this investment should enable the credit union sector to lend an additional £20million to consumers.
The credit union movement already provides a vital service to over 1.8 million people across Great Britain and Northern Ireland. By providing funding which helps credit unions grow quickly but responsibly, Lloyds Banking Group is helping build the sector's capacity to sustainably meet an important social need.
The awards, selected by an independent grants committee in partnership with the Credit Union Foundation, provide the targeted strategic funding support that enables the successful credit unions to lend an additional £5m each year across the UK.
Without Lloyds’ investment, it would have taken the 2014 beneficiary credit unions more than nine years at current profitability to accumulate the necessary reserves to enable them to lend at this capacity; with one beneficiary, it would have taken 35 years.
Robin Bulloch, Managing Director, Lloyds Bank at Lloyds Banking Group said: “Credit unions play a crucial role in helping people access finance in a safe and responsible way, and helping credit unions to expand their reach by more than £20m is fundamental to our public commitment to help Britain prosper. This support means that more customers who need small loans after Christmas have another lending option available to them."
Liz Barclay, Independent Trustee of the Credit Union Foundation and Chair of the Fund Grants Committee, said: “For the second year running, we have had a fantastic response to the scheme with applications from many credit unions looking to expand their services and serve more of their local communities.
“Lloyds Banking Group’s £4 million investment over 4 years via the Credit Union Foundation increases the sector's capacity to lend an additional £20m and delivers the potential to give a major boost to sustainable credit union growth for many years to come. The capital awards are a long term investment in the sustainability of credit unions and will help more people to access the financial services they need in their community.”
Economic Secretary to the Treasury, Harriet Baldwin MP welcomed the latest awards saying: "Lloyds Banking Group's continuing support is a very welcome addition to the significant contribution of the credit union movement, helping them serve even more people in their communities. I hope other banks will consider this in future."
The funding programme is innovative in its strengthening of the financial position of credit unions and gives them the necessary capacity to develop new strategies for sustained and effective growth. The award is built principally of large scale grants of between £50,000 and £100,000 and a smaller number of seed funding awards of between £10,000 and £20,000.
A full list of the 2015 awards can be found here, and the Fund will reopen for 2016 applicants later this year.