Social Investment Scotland (SIS) has delivered funds on behalf of the Scottish government to help credit unions use digital tools to identify benefits and financial support their members may be missing out on.
The Credit Union Income Maximisation Digital Innovation Project has awarded £94,000 to 10 credit unions, to help them embed income-maximisation tools directly into their digital systems. This means that when a member applies for a loan or updates their details, they are automatically shown benefits and entitlements they may not be claiming.
For many of Scotland’s lowest-income households, unclaimed benefits represent a significant source of lost income, says SIS, and the tools can boost household income, ease financial pressure, and reduce the need for repeat or high-cost borrowing.
Research by Financial Inclusion for Scotland (FIFS), which is managed by SIS, has identified an estimated 175,000 people in Scotland each year who need a small loan under £1,000 but cannot access one from an affordable provider, an annual lending gap of up to £130m.
”Credit unions are central to a fairer financial system,” said FIFS chair Stephen Pearson, “and this funding equips them with digital tools that directly help their members maximise their income.
Related: Irish credit unions gave €8m to community, says all-island report
“With an estimated 175,000 people in Scotland unable to access affordable small loans each year, we need to use every lever available to strengthen financial resilience. Matching strategy with practical, digital action is how we start to close that gap.”
Equipping credit unions with better digital tools is part of a broader effort to strengthen the affordable lending sector’s capacity to reach those most in need.
FIFS has also delivered a series of webinars for credit unions, fintech providers and sector stakeholders to share implementation insights and accelerate adoption of the technology.
Social justice secretary Shirley-Anne Somerville said: “We know that many benefits go unclaimed, which is why the Scottish government is pleased to support this project as we drive forward our mission to eradicate child poverty and improve household finances.
“Credit unions play a crucial role in providing financial services and responsible credit to their communities while helping people access the support they are entitled to.”
Liz Campbell, general manager of Castlemilk Credit Union, added: “We see every day how hard people are working to make their budgets stretch. Often, support is available but it’s not always easy to find or understand. By building these income-maximisation tools directly into our systems, we can have those conversations at the right time and make sure our members aren’t missing out on money they’re entitled to.
“This funding helps us combine trusted, face-to-face support with smarter digital tools to strengthen financial resilience across our community. Having this support is fundamental to our success and greatly appreciated.”
