Lloyds Banking Group is granting £1m to 21 credit unions through its Credit Union Development Fund.
Credit unions will receive two types of grants – large awards between £50,000 and £100,000, and seed-funding awards between £10,000 and £20,000.
The fund was set up in 2014 as part of Lloyds’ Helping Britain Prosper Plan and run in partnership with the Credit Union Foundation. It aims to strengthen the financial position of credit unions and give them the capacity to develop new strategies for sustained and effective growth.
An independent panel selected the recipients of the awards.
The large awards will be granted to 11 credit unions to provide a contribution to their reserves and help remove barriers to growth and innovation. Ten other credit unions will receive seed-funding awards to help them make the changes they need to apply for a large award in a subsequent year or to pay for costs of merger.
One of the 11 credit unions to receive the large grant, Riverside Credit Union in Merseyside, received £17,000 in 2015 to launch a new website and has now been awarded £90,000 for capital reserves.
Chair Mike Knight said: “Riverside Credit Union were helped significantly with a seed grant that facilitated the development of our new website. This additional £90,000 grant from the Lloyds Foundation is a big deal. Don’t believe me? Ask our members!”
Robin Bulloch, managing director of Lloyds Bank and Bank of Scotland at Lloyds Banking Group, added: “We undertook the largest survey of credit unions to date and they told us the most important role we can play in the credit union movement is as a funder.
“We are committed to being the leading supporter of credit unions in the UK, and our development fund underlines our public commitment to help Britain prosper. The £4 million fund will help the sector to lend an additional £20 million to their members.”
Liz Barclay, chair of the Credit Union Foundation and the Development Fund Grants Committee, said Lloyds had committed to a £4m investment over four years, with the scheme now in its third year.
“Credit unions provide an ethical and affordable financial service to some of the hardest to reach and most financially excluded communities in the UK,” she added. “We’re seeing good quality applications for these capital awards from credit unions committed to expanding and improving the services they offer those communities.”
Credit unions will also be able to apply for grants part of the remaining £1m of funding, which will be open for applications soon.