Credit Union support scheme

If you are using this scheme to provide awards of subsidy, you must inform the Subsidy Control Unit – email: scu@gov.wales.

Wales

Credit Union Support Scheme

Section 60 of the Government of Wales Act 2006, which permits the Welsh Ministers to do anything they consider appropriate to achieve the object of promoting or improving the economic, social and environmental well-being of Wales; and section 58A of the Government of Wales Act 2006, which provides the Welsh Ministers may do anything which is ancillary to the exercise of any of their other functions.

The mission statement of the Credit Union Support Scheme is to increase and radically improve financial inclusion in Wales by improving access to ethical and affordable financial products provided by credit unions.

Due to a mixture of market failure and the economic climate since the pandemic, financial exclusion remains a pressing challenge, with millions of low-income people across the UK not able to access the necessary financial products and services they need. This is the exclusion that Welsh Government is trying to alleviate via providing grants to credit unions.

The effort to scale the Welsh credit union sector is a critically important component of the drive for a fairer financial services market. It is a key part of the jointly owned Money and Pensions and Welsh Government’s Strategy for Financial Wellbeing.

Research by Fair4All Finance found over 20 million people across the UK are living in financially vulnerable circumstances.

The subsidy will help develop capacity in the credit union market at times of crisis. For example, having the ability to provide capital funding for balance sheet resilience. The absence of resources can impede credit unions’ ability to grow if there is inadequate levels of capital.

The subsidy will enable greater access to credit amongst people on low incomes who have poor creditworthiness, helping to increase credit union membership growth across Wales, aiming to increase the number of financially excluded people accessing credit union services and products across Wales.

Welsh Government

Wales-based Credit Unions only.

Financial and insurance activities.

From 1 January 2026 to 1 January 2031.

£20,000,000

All subsidy awarded under the scheme will be awarded by way of direct grants.

This subsidy is only available to Welsh credit unions: it is not available to any other type of financial enterprise operating in Wales.

It will support with costs relating to the loan expansion underwriting scheme undertaken by Welsh credit unions and for revenue project activities to grow the credit union sector in Wales by funding marketing activities and awareness raising and other promotional activities in schools and work places to increase savings via credit unions. It will also provide capital support funding projects related to resilience, such as fintech advancements to bring efficiencies / improve streamlining to back office functions; Fintech advancements that will support improved access or enhanced services for members, and advancements that would directly support the expansion of credit union services into new geographical areas that are currently under served; Supporting the capital costs linked to a strategic merger of two or more credit unions to aid resilience; and Supporting the capital thresholds of credit unions where there is a clear risk of not meeting PRA thresholds.

The grants provided to credit unions under the subsidy are all monitored on a quarterly basis against pre agreed annual targets. Welsh Government funding under this scheme can provide up to 100% of the total project costs - there is no match funding requirement or subsidy ratio applied. With regard to the funding provided under the loan expansion scheme, the funding is calculated on a formula measuring the size of the credit union and factoring in the risk presented to the credit union. This is calculated by Welsh Government.

£900,000

For more information about applying for support under this scheme, please contact the team at: creditunions@gov.wales

For more information about this scheme’s compliance with the Subsidy Control Act 2022, please contact: