The investment is part of Fair4All's Affordable Credit Scale Up Programme
Great Western Credit Union (GCWU) has secured £1.63m in funding from Fair4All Finance’s Affordable Credit Scale Up Programme. The credit union is aiming to add an extra c£22m of affordable lending capacity for over 15,000 more members by 2025 to meet the increased appetite for low-cost finance across South West England. In addition to the investment, GWCU has signed the Affordable Credit Code of Good Practice to ensure that members are treated fairly, especially those in financially vulnerable positions.
With an increased focus on fintech and a recent merger with Wyvern Savings and Loans in Dorset, GWCU will receive up to £1.5m in subordinated debt to accelerate sustainable growth. Fair4All Finance will match up to £1m in funding by other investors, with hopes to attract additional external capital into the sector and will also provide a £130,000 grant to test and develop tools so that success can be replicated elsewhere.
The news comes as the cost of living crisis is now the “top concern” for families across the UK, with inflation potentially rising to a 40-year high. GWCU currently serves around 20,600 members across the region, in Gloucestershire, Wiltshire, Somerset, Dorset, Bath and Bristol. When members bank with GWCU, money is reinvested into local people, businesses and communities, bringing social and economic benefits to the region.
James Berry, CEO of Great Western Credit Union, said:
At a time when finances are under such pressure for ordinary households throughout the South West we’re delighted that Fair4All Finance have come on board as an investor, supporting our continued growth in delivering affordable, responsible credit to many thousands more people throughout our region.
“As the cost of living increases bite ever harder we see many people needing credit more than ever to help them with unexpected expenses, family emergencies and basics such as white goods. Growing our reach with Fair4All Finance’s investment means we can save borrowers hundreds of pounds in interest compared to high cost lenders, which makes even more of a difference right now. Great Western Credit Union delivers considerable social value, benefiting communities throughout Gloucestershire, Wiltshire, Somerset and Dorset as well as the Bristol region. That social value is now set to grow significantly over the coming years.”
Holly Piper, Investment Director at Fair4All Finance says:
We’re excited to announce our investment in Great Western Credit Union. They are a well run and ambitious credit union serving an increasing number of customers in vulnerable circumstances. We were impressed by their strong growth journey so far and their plans to sustainably scale up their affordable lending capacity. We look forward to supporting them to do that over the next few years.
“We’ve now committed over 80% of the funds from our Affordable Credit Scale Up Programme. We know our funding alone isn’t enough though, as demand increases due to the impact of the Covid-19 pandemic and the cost of living crisis. We encourage other funders and stakeholders to join us in providing long term funding to scale up the provision of affordable credit and help fill a growing gap.”
The Affordable Credit Scale Up Programme has committed £25m to community finance organisations, helping support business plans projected to triple the availability of affordable credit to over £900m by 2025.