North Ayrshire Council has pledged £150,000 through a local credit union to support vulnerable people who have been financially disadvantaged as a result of the Covid-19 pandemic.
Available to families, citizens and communities in North Ayrshire, the Access to Finance Fund will be available via Kilwinning’s 1st Alliance Credit Union.
The authority says the scheme is developed with low-income households in mind, with 1st Alliance granting financial support to applicants who would previously have not met lending criteria.
Celebrating its 17th anniversary this year, the community-based savings and loans co-operative has continued to offer support to its members throughout the pandemic despite the office being temporarily closed during lockdown.
Carol McHarg, CEO of 1st Alliance, said: “Now that restrictions are being lifted and we are getting back to business as usual, we have experienced an influx of members seeking lending support due to the financial difficulties they have faced as a result of Covid-19.
“With many seeing a sharp decline in their income due to furlough or periods of unemployment throughout the pandemic, members who would have otherwise been able to apply for personal loans have not met the current lending criteria.
“After being turned away, vulnerable members have had no other choice but to seek the help of high-cost lenders such as doorstep lenders who often give cash loans without any formal affordability or credit checks, while charging extortionate interest rates.
“Victims believe they are being offered a fair service but the interest rates of high-cost lenders can escalate and if repayments are not being made, the interest keeps growing, taking much longer for the original loan to be repaid.
“The £150k Access to Finance Fund will mean that the capital limit of our loans can be adjusted and the way we judge affordability can be reviewed allowing us to provide vital financial assistance to families who are in desperate need.”
North Ayrshire Council leader Joe Cullinane said: “I am delighted the council is working in partnership with 1st Alliance Credit Union via our North Ayrshire Recovery and Renewal Plan to help support the most vulnerable members of our communities who are struggling financially.
“This funding is a great example of community wealth building in action, a pledge that we have made as a council to invest in and support businesses in the local economy, and in particular to back co-operative ownership models such as credit unions.
“It is our commitment to continue to help alleviate the stress and worry low-income households have faced as a result of the pandemic and we would encourage anyone who is experiencing financial difficulties to seek safe and affordable credit options from trusted lenders.”