Lloyds Banking Group has re-emphasised its commitment to providing leadership in the area of financial inclusion by announcing its intention to provide £1 million per year to credit unions. It has also committed to support 1 in every 4 of Britain’s social banking customers.
This announcement falls during the week the Group revealed its full Helping Britain Prosper Plan where, for the first time, it revealed seven separate and significant public commitments to address some of the big issues facing Britain today.
Graham Lindsay, Director, Responsible Business for Lloyds Banking Group said: “Our Helping Britain Prosper Plan incorporates bold, public commitments to help address some of the big issues facing Britain today. It’s about putting customers and communities at the heart of everything we do. The Plan is not just for those customers enjoying relative prosperity, but also those facing financial difficulties. For this reason we believe our annual investment of £1m into Credit Unions is one of our most critical.”
Mark Lyonette, Chief Executive of the Association of British Credit Unions (ABCUL) said, “We very much welcome the package of support for the credit union sector as announced today by Lloyds Banking Group. We look forward to working with the Group to ensure this generous investment complements the work that is already taking place to strengthen the sector. The Credit Union Expansion Project will benefit greatly from the secondment of Lloyds’ experts and the expansion of the signposting scheme should help many more people access appropriate services from their local credit union.”
Minister for Welfare Reform Lord Freud said: “Credit unions play a vital role in helping people build up savings and have access to loans, especially those who find it difficult to have mainstream high street bank accounts. This is why we are investing £38m to help credit unions modernise and grow.
“I absolutely welcome this support from Lloyds for extra funding and I particularly welcome the commitment to send experienced banking staff to support the growing efficiency of credit unions. I hope other banks will also consider this and provide support to help local credit unions.”
Lloyds Banking Group commenced a pilot in September 2013 through 25 Lloyds and Halifax branches in the Leeds area to signpost appropriate customers to the Leeds City Credit Union and local money management charities. Over 1,000 customers to date have taken away information about these organisations.
The approach of the pilot programme, which was due to end this month, has been adopted on a permanent basis and will be expanded to a further nine UK flagship locations with the cascade of basic information becoming available through all Lloyds and Halifax branches.
Chris Smyth, Chief Executive, Leeds City Credit Union, said: “Credit Unions play a critical role. We know this from our pre-Christmas trading and coinciding with the Lloyds pilot, was 25% higher than the prior year. In this period our lending was almost £2m. This represents a terrific saving in terms of interest of £1.3m had these loans gone to a high cost lender instead.
“Our post Christmas trading during January and February is 100% up on the same period last year. We believe this is an exceptional turnaround and may indicate a serious shift in mood across our target market towards the credit union – which is great news for all.”
Lloyds Banking Group is Britain’s biggest provider of social bank accounts.