Advancing Affordable Credit: Recommendations to the Scottish Government

February 26, 2021

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In the Scottish Government’s Programme for Government 2020-2021, the Carnegie UK Trust and the Affordable Credit Action Group were asked to consider what more could be done to bolster affordable credit provision in Scotland.

We have now submitted our report, Advancing Affordable Credit to the Scottish Government, setting out our 10 recommendations to support the scale up of affordable credit in Scotland. These recommendations were informed by three workshops that we held in autumn 2020, involving over 40 different organisations and input from the Affordable Credit Action Group.

Advancing affordable credit is a complex, deep rooted challenge. There is no ‘silver bullet’ solution, but a rather a series of complementary interventions that are needed, across different parts of the system. The recommendations that the Trust has put forward are designed to support systemic change in affordable credit supply, growing the sector to support many more people across the Scotland.

We believe that a long-term commitment and a systemic approach are essential if we are to make more affordable credit available to many more people in Scotland, saving vital money for families and communities and supporting social justice. Given the impact of COVID-19 on household financial resilience and the affordable credit sector itself, now is the time to commit to supporting change to scale and sustain.

We have made the following 10 recommendations to the Scottish Government, to achieve strategic scale-up:

  1. Establish a new partnership between Scottish Government and Fair4All Finance to improve the supporting infrastructure for affordable credit growth in Scotland.
  2. Develop and deliver a 12-month marketing and promotional strategy to bring a step change in the visibility and validity of community finance in Scotland.
  3. Commission an in-depth feasibility study on options to deliver improvements in the technology infrastructure and use of data in affordable credit supply in Scotland.
  4. Strengthen the commitment to financial wellbeing through key interventions with Scotland’s business community, including Fair Work First and the Scottish Business Pledge.
  5. Boost the take up of Help to Save and Prize Linked Savings schemes.
  6. Establish a short-term working group with social landlords and affordable credit providers to agree an action plan to strengthen links between the two sectors.
  7. Establish a Community Finance Strategic Support Fund that supports community finance to consider their future operational state.
  8. Establish a short-term working group to report to the Minister on the feasibility, costs and benefits of a social enterprise digital debt collection and arrears management social enterprise.
  9. Undertake a trial of rent-flex for social housing tenants and encourage flexibility in Council Tax payments to support households with irregular income.
  10. Commission new research into the prevalence of online illegal money lending in Scotland

Further detail on the recommendations, actions proposed and rationale behind them are included in our full report which is available here.