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Credit Unions

Question Time — Scottish Executive — Finance and Sustainable Growth – in the Scottish Parliament at 2:15 pm on 11th September 2008.

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Photo of Hugh O'Donnell Hugh O'Donnell Liberal Democrat 2:15 pm, 11th September 2008

To ask the Scottish Executive how it supports individual credit unions and regional networks of such unions. (S3O-4168)

Photo of Jim Mather Jim Mather Scottish National Party

Credit unions are key organisations that help to combat financial exclusion. Consequently, our fairer Scotland fund underpins local authority support for credit unions. In addition, the Scottish investment fund has offered a new means of support from 1 September for credit unions that are prepared to make a transformational step change in their activity.

Photo of Hugh O'Donnell Hugh O'Donnell Liberal Democrat

Several credit unions in South Lanarkshire have expressed concern about their limited access to the fairer Scotland fund. The information that I have received suggests that some regulations exclude them from drawing down money from that fund.

I understand that some credit unions might face serious difficulty because people might use the new regulations on low-income, low-asset debtors to avoid paying debts to credit unions. Will the minister look into that?

Photo of Jim Mather Jim Mather Scottish National Party

The issue should be considered in the wider context. In addition to the fairer Scotland fund, we have established the Scottish investment fund and the third-sector enterprise fund, which is the most likely source of funding for credit unions that intend to become more socially enterprising.

On the wider point about new regulations, I would welcome a meeting with the credit unions as an industry sector so that they can have a dialogue with us, and I would welcome Hugh O'Donnell's presence at such a meeting. That would give us more clarity about how credit unions might move forward and fit into the wider scope of the funding, the new approach and the general thrust that we want our credit unions to be all that they can be.

Photo of Dave Thompson Dave Thompson Scottish National Party

Does the minister have information on the number of councils, health boards and other public bodies that have helped to establish staff credit unions to benefit employees and their families? Will he encourage such bodies to establish credit unions?

Photo of Jim Mather Jim Mather Scottish National Party

In preparing to answer question 4, I found that Scotland has 115 credit unions, of which 13 were established by councils and other public bodies. However, the bald fact is that it is up to the employers whether they wish to set up a credit union and encourage staff members to join it. Clear benefits are associated with workplace credit unions, such as the deduction of monthly savings at source. However, there is nearly full coverage in Scotland of existing credit unions. That complements any new initiative that might take place in the workplace.