5. Will the Minister provide an update on how credit unions are supporting families in Wales? OQ59701

Diolch yn fawr, Joel James. We're working closely with credit unions to provide ethical loans and savings, delivered through 13 projects. In addition, we are providing £1.2 million for a loan expansion scheme. I also engage regularly with responsible lenders, to ensure they're doing all they can to support people through the cost-of-living crisis.

Thank you, Minister, for your response. According to their website, Cardiff and Vale Credit Union, while selling themselves as an organisation that, and I quote,

'offer flexible loans on fair terms, with low rates, no fees' seem to be offering quite staggering interest rates for loans that are massively above market rates. In fact, Minister, a standard family loan for £1,000 would incur an interest rate of 41.2 per cent, and a loyalty loan for £1,000 would see someone paying 40.2 per cent in interest. Indeed, most of the rates they offered on loans of different amounts were considerably higher than someone would get from a bank or building society. And, though they do offer competitive loan rates, these are restricted-access only and won't be available to many people who will be applying for them. I'm most concerned that, for family loans, listed for school uniforms, trips, holidays, Christmas and family holidays, Cardiff and Vale Credit Union will now accept child benefit as a method of payment. So, the benefit paid to families to make sure children are properly fed and clothed can now be used to pay the 41.2 per cent interest on loans to the credit union. However you look at this, Minister, it's wrong for a family that is struggling and needs money for school uniforms to pay 41.2 per cent interest, which is an interest rate within the region of the infamous pay-day loan companies. With this in mind, do you believe that this rate is punishing people for being poor and that it's not within the ethos of the credit union's stated aims of fair terms and low rates? Thank you.

Well, thank you for that question. I'm a very proud member—I should declare that interest—of Cardiff and Vale Credit Union, as are so many others, and I would urge you to visit Cardiff and Vale Credit Union. We visited credit unions after Christmas to congratulate them on the work that they're doing and, indeed, to support them as ethical lenders, providing access to affordable credit, setting up community hubs, working with families through the school-saving scheme.

But I think it is important to say we have supported them with this loan expansion scheme. So, £1.2 million's been provided to 10 credit unions for this loan expansion scheme, and it does allow people with poor credit history to access affordable credit. Up until March of this year, almost 1,700 loans were issued through this scheme, and that's continuing to increase. There are financial challenges being faced by households across Wales, but the credit unions across Wales—and I've visited many, and I do encourage Members to do so, across the Chamber—have welcomed this particular loan expansion scheme. And, let's face it, in terms of supporting the cost of living, £1.2 million was given to credit unions in the last financial year to expand their lending. That's been recycled into this financial year, and it's the ethically driven credit union sector that's attracting and serving those very financially vulnerable new members.

But can I also take the opportunity to say that more than 35 per cent of credit union borrowers are lone parents with dependent children? They provide family loans, where repayments are deducted automatically from benefit payments. It's very popular—it opens up access to affordable credit and, with the savings element, it helps parents to save more regularly. They're very engaged with their members, credit unions. They're affordable, not for profit and ethical.

And finally, can I say we're also joining with Fair4All Finance? And we're joining with Scotland—all devolved nations, as well as England—we're joining with them, and responsible lenders, to test a no-interest loan scheme, which I'm sure the Member will be interested in. So, credit unions in Wales will be referral partners for it. It's being delivered by Social Investment Cymru, Fair4All and Salad Money, and I shall be glad to report on how that pilot is going.

The next question is from Darren Millar—question 6.