Credit unions play a key role in offering affordable, responsible credit to underserved communities. The Government has supported the sector in the following ways:
Announcing at Autumn Statement 2016 that a greater proportion of funds recovered from illegal money lenders will be allocated to incentivise vulnerable people to join, save and borrow with a credit union instead of turning to loan sharks;
Increasing the maximum interest rate that credit unions can charge on loans from 2% to 3%. This has helped credit unions become more stable and allowed them to offer reliable, affordable credit to consumers who may otherwise have had to resort to more expensive means;
Contributing £600,000 to an initiative developed by the Archbishop of Canterbury and Young Enterprise, to start savings clubs in primary schools and educate young children in the benefits of saving, while promoting awareness of credit unions to children and their parents. Lifesavers works with local credit unions to help run savings clubs in schools; and
Initiating the Credit Union Expansion Project, a £38 million project aimed at helping the sector modernise and offer new services.