Lloyds Banking Group is to make a donation of £1m a year to credit unions in this country for the foreseeable future, the group announced today.
The announcement is part of the banking group’s Helping Britain Prosper plan, in which it aims to address some of the big issues facing the country, including financial inclusion which includes providing access to affordable credit.
Credit unions are non-profit-making cooperatives whose members can borrow money from pooled deposits at low interest rates.
The Association of British Credit Unions said its latest figures showed there were 371 credit unions in England, Scotland and Wales, serving more than a million people.
These collectively looked after £918m in deposits, had £641m out on loan and more than £1.1bn in assets, Abcul said.
Lloyds said it had not yet been decided whether to give the £1m to Abcul for distribution or to individual credit unions.
"Lloyds Banking Group will work closely with the government, the Association of British Credit Unions and other bodies to consider carefully how this £1m should be invested as it looks for ways to lay down firm foundations that support vulnerable customers," a Lloyds spokeswoman said.
The group has not set an end date for the investment.
The bank is extending a pilot scheme, launched in September 2013, that points customers to the Leeds City Credit Union and local money-management charities. The bank said it would make the signposting scheme permanent and extend it to nine other areas in the UK.
"We very much welcome the package of support for the credit union sector as announced today by Lloyds Banking Group," said Mark Lyonette, chief executive of Abcul. "We look forward to working with the group to ensure this generous investment complements the work that is already taking place to strengthen the sector."