Two credit unions secure government funding to drive digitisation

Capital Credit Union and the Police Credit Union were awarded funding through the Affordable Credit Challenge

Capital Credit Union in Scotland and Police Credit Union have been awarded government funding to streamline their digital offer.

Capital Credit Union will work with fintech Soar and software company Nivo to boost its digital transformation through the development of the mobile app, as well as automated loan application processes available 24/7.

Likewise, Police Credit Union has teamed up with Credit Kudos to develop a new reward loan that will use Open Banking to monitor the borrower’s behaviour and dynamically reduce the interest rate they pay. The credit union thinks the approach will allow more customers to access fair credit whilst reducing risk for community lenders and enabling lenders to process a higher total volume of applications. 

The credit unions and their partners were awarded £200,000 each from the Affordable Credit Challenge, a government scheme designed to support innovative solutions to make credit more accessible and affordable in the UK. Run by Nesta Challenges in partnership with HM Treasury, the scheme granted £200,000 to three finalists from across the UK, including Capital Credit Union and its partners.

Capital Credit Union and SoarMarlene Shiels, CEO of Capital Credit Union, said the grant is a “game changer”. “Our partnership with Soar and Nivo has enabled our vision to become a reality and provide our members with an excellent digital experience. Very importantly, it also gives us the opportunity to educate members and potential members on how to build financial resilience through savings and access to affordable credit,” she said.

Soar’s founder and CEO, Andrew Duncan, added: “We’re excited to have won this prestigious challenge. It’s testament to the hard work of our team and the close collaboration with our partners at Capital and Nivo. Our aim is also to ensure the technology developed for Capital can be rolled out across the UK to positively affect the lives of millions of people.”

Paul Norgrove, CEO of the Police Credit Union (Serve and Protect Credit Union), said: “We exist to provide affordable loans for our members and always want to treat them as individuals — not just a credit score.

“Our reward loan solution, created with Credit Kudos, allows us to support even more members and reward them for healthy financial behaviours. Using open banking derived scores, the solution will automatically adjust the interest a borrower pays during the life of a loan or provide rewards to encourage financial behaviour. This means borrowers from the police, military and wider protective services family can proactively and positively impact their own financial situation.”

John Glen, the economic secretary to the Treasury, said: “The UK’s world-leading fintech sector has a huge role to play in helping the most vulnerable access alternatives to high cost credit. That’s why we set up the Affordable Credit Challenge, bringing together fintechs and community lenders to develop new, pioneering solutions to this challenge. The three winners have done amazing work and I look forward to seeing how they help more people to access affordable credit products.”