Bristol based credit union is the latest community finance organisation to benefit from Affordable Credit Scale Up Programme.
Fair4All Finance has announced a new investment of up to £1.63m in Bristol based Great Western Credit Union.
The investment is the latest support from the Affordable Credit Scale Up Programme, designed to increase the supply of affordable credit for people in financially vulnerable circumstances.
Great Western Credit Union provide fair and affordable financial services for people living or working across the underserved South West region. An estimated 50% of their customers live in areas ranked as the most deprived 20% in England and in 2021, 64% of new loans they issued were equal to or under £1,000, with an estimated 61% issued to social housing renters.
They are already on a strong growth journey and will receive up to £1.5m in subordinated debt to accelerate that growth in a sustainable way. As part of this, Fair4All Finance will match up to £1m in funding by other investors, hoping to draw in additional external capital into the sector. In addition, a £130,000 grant has been committed to test and develop tools that can be replicated across the sector.
Great Western Credit Union aim to add an extra c£22m of affordable lending capacity for 15,000 more customers by 2025, contributing to our challenge of scaling affordable credit to meet ever increasing demand.
Alongside all the social purpose lenders Fair4All Finance supports, Great Western Credit Union have signed up to the Affordable Credit Code of Good Practice – ensuring that customers are treated fairly.
Fair4All Finance’s Affordable Credit Scale Up Programme has now committed £25m to community finance providers, backing business plans projected to triple the availability of affordable credit to over £900m by 2025.
Holly Piper, Investment Director at Fair4All Finance says:
‘We’re excited to announce our investment in Great Western Credit Union. They are a well run and ambitious credit union serving an increasing number of customers in vulnerable circumstances. We were impressed by their strong growth journey so far and their plans to sustainably scale up their affordable lending capacity. We look forward to supporting them to do that over the next few years.
‘We’ve now committed over 80% of the funds from our Affordable Credit Scale Up Programme. We know our funding alone isn’t enough though, as demand increases due to the impact of the Covid-19 pandemic and the cost of living crisis. We encourage other funders and stakeholders to join us in providing long term funding to scale up the provision of affordable credit and help fill a growing gap.’
James Berry, CEO of Great Western Credit Union says:
‘At a time when finances are under such pressure for ordinary households throughout the South West we’re delighted that Fair4All Finance have come on board as an investor, supporting our continued growth in delivering affordable, responsible credit to many thousands more people throughout our region.
‘As the cost of living increases bite ever harder we see many people needing credit more than ever to help them with unexpected expenses, family emergencies and basics such as white goods. Growing our reach with Fair4All Finance’s investment means we can save borrowers hundreds of pounds in interest compared to high cost lenders, which makes even more of a difference right now. Great Western Credit Union delivers considerable social value, benefiting communities throughout Gloucestershire, Wiltshire, Somerset and Dorset as well as the Bristol region. That social value is now set to grow significantly over the coming years.’