Ministers unveil £1m fund to provide low income families with affordable credit

The Scottish Government has announced an additional £1m in funding to provide low income families with affordable credit.

Part of the Tackling Child Poverty Delivery Plan, the Scottish Government said the funding, which will double the size of the Carnegie Trust’s Affordable Credit Loan Fund, will help reduce the cost of borrowing and make sure people can access financial products and services that meet their needs in a responsible way.

Unveiling the funding, Equalities Secretary Angela Constance described insecurity of income as “one of the biggest challenges faced by those in poverty”.

She said: “By investing £1m in the Carnegie Trust’s Affordable Credit Loan Fund, we are doubling the amount available for social lenders to offer affordable loans.

“We are showing how Scotland is leading the way on tackling the problem of access to affordable credit. We want to provide a clear alternative to organisations, such as payday lenders, that can often charge extortionate interest rates and can leave people trapped in a cycle of debt.

“We will continue to work with the Carnegie UK Trust and the community lending sector to ensure that everyone who needs it has access to the financial products they need to help them get on in life.”

Martyn Evans, Chief Executive of the Carnegie UK Trust, added: “The launch of the first Child Poverty Delivery Plan is a hugely significant milestone in the drive to eradicate child poverty in Scotland. At present, those in poverty have to pay a significant premium whenever they borrow money. This has to change.

“We need to make more affordable, socially-motivated credit, linked to other services, far more widely available. We are therefore delighted that the Delivery Plan includes a commitment to invest in the Carnegie Affordable Credit Loan Fund and provide new investment to those not-for-profit lenders giving people a much fairer deal.”