£5m resilience fund launched for credit unions and other community financers

Fair4All Finance has launched the project to help the sector and its borrowers through the cost of living crisis

Community finance organisations and associated organisations are being invited to apply for grants and investment funding from Fair4All Finance.

Fair4All, a team of specialists in financial inclusion, has launched a £5m Community Resilience Fund, offering sums from £10,000 to £500,000, “in recognition of the cost-of-living challenges for community finance providers and their borrowers, to help the community finance sector to grow and help more people”.

The organisation highlights that a quarter of UK adults have less than £100 in savings, “meaning that affordable credit can be a vital lifeline for millions”.

Fair4All warns: “Unfortunately, there is a UK-wide lack of affordable credit options for less affluent applicants. Partly as a result of this, the number of Britons to have used illegal lenders is estimated at more than three million.”

Interested organisations have until 31 January to apply for the funding.

Different grants are available for a range of purposes including covering extra overheads incurred during the cost-of-living crisis, as well as investment in infrastructure, providing capital, and for other areas as required. 

Separate funding is also available for measuring the impact of investments made from the main fund.

The community finance sector, made up of not for profit, member-owned credit unions and community development financial institutions (CDFIs, “plays a key role in supporting the financial wellbeing and resilience of a wide range of customers,” adds Fair4All.

“They are particularly relevant to the 17.5 million UK adults who are in what Fair4All Finance refers to as ‘financially vulnerable circumstances’, meaning that they do not have safety nets such as access to affordable credit, which would enable them to manage unexpected expenses and smooth irregular income.“

Holly Piper,  investment director at Fair4All Finance, adds: “The role of community finance providers has never been more important than in the current cost-of-living crisis. The lending they offer gives their members and customers the dignity of providing for themselves and their families, without resorting to higher-cost credit or illegal options like loan sharks.

“We have designed this new fund to be relevant to a wide range of community finance organisations and associated organisations, and to be responsive to their specific needs and challenges. We look forward to receiving applications, and to seeing grantees go from strength to strength and supporting more and more households in the years to come.”

A not-for-profit organisation funded from dormant assets, Fair4All Finance’s mission is to increase the financial resilience and wellbeing of people in vulnerable circumstances by increasing the availability of fair and accessible financial products and services.

In addition to funding a number of community finance providers, it provides resources and research to support the sector, and also works with mainstream financial services providers to encourage them to adopt more financially inclusive policies.