New Carnegie UK Loan fund will support affordable lending to financially excluded households

January 23, 2018

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A new £1 million fund has been launched today to help tackle the poverty premium for low income borrowers in Scotland.


Loans from high cost credit companies, including pay day loan firms and door step lenders, currently cost people in Scotland millions of pounds in interest repayments every year – with people with the least usually paying the most for their credit.


The new Affordable Credit Loan Fund has been set up by the Carnegie UK Trust, in partnership with Social Investment Scotland, to help more people access affordable credit, delivered on a not-for-profit basis by a range of social enterprises[1]. The new loan fund will be available to these responsible finance providers as a repayable loan over 10 years, to help them expand their loan book to reach many more people.


In addition to loans, the not-for-profit responsible finance providers also offer their customers a wide range of financial inclusion services, including debt advice, savings opportunities, income maximisation and budgeting services and the investment will also support more people to access these services.


The launch of the new fund was accompanied by the release of a new short film, Speaking out for Fair Credit, featuring actor and activist Michael Sheen, and testimony from customers who have been helped by some of the UK’s affordable lenders. The video highlights the impact not-for-profit lenders can have in borrowers’ lives and asks that government, the business community and civil society support this sector, which is providing a vital service to people who are financially excluded.


Very Rev. Dr John Chalmers, former Moderator of the Church of Scotland and Chair of the Affordable Credit Action Group, said:

“The poverty premium means that those who can least afford to pay for credit end up paying the most. While credit is not a substitute for decent wages or welfare benefits, more affordable credit has a vital role to play in tackling poverty. If more people in difficult financial circumstances were able to access the support of the social lenders set up to offer them affordable, alternative sources of funds, that would save them significant sums of money, enabling them to improve their quality of life. I welcome this important new initiative.”


Sir John Elvidge, Chair of the Carnegie UK Trust, said:

“We want to support better alternatives for some of our most financially excluded citizens, allowing them to borrow money in a fair, affordable and responsible way. This fund will help social investors demonstrate that they can provide a responsible and sustainable solution to the complex problem of access to affordable loans.”


Nick Kuenssberg, Chair of Social Investment Scotland, said:

“In recent years Social Investment Scotland has built up significant expertise in this sector and have made a number of substantial investment commitments to affordable credit provides operating in Scotland and beyond. The need for appropriate investment and support is clear and the initial investment from Carnegie will be crucial in supporting the growth of this sector. This is not only to improve the operational sustainability and efficiency of providers but more importantly creating a real, measurable and sustainable impact upon people’s lives- neatly aligning with our mission here at SIS. We hope to work with other partners to increase the size of the fund over time and welcome the initiative of Carnegie to provide the thinking and impetus for this important development.”


Equalities Secretary Angela Constance MSP said:

“I welcome this pledge to increase access to affordable credit and provide a clear alternative to institutions and organisations, such as payday lenders, that can often charge extortionate interest rates and can leave people trapped in a cycle of debt. That is why it is so important that social lenders, such as Community Development Finance Institutions (CDFIs) and credit unions – are providing more affordable loans, where it is appropriate, at significantly cheaper interest rates than commercial alternatives. Scotland has the potential to lead the way on tackling the problem of access to affordable credit and financial exclusion. We will continue to work with the Carnegie UK Trust and the community lending sector to ensure that everyone who needs it has access to the financial products they need to help them get on in life.”


Michael Sheen said:

“High cost credit has for too long been targeted at those who can least afford it and those who are most vulnerable in our society. The need for ethical alternative providers is clear, whether they be on our local high streets or available online. But it’s not just about creating more providers – we need to do more to enable them to compete with the high cost providers and to provide vital financial support to communities across the UK, putting people before profit.”


If you are a social enterprise interested in accessing or finding out more about the fund, please visit

If you interested in working with the Trust to help build the fund and support more people access affordable credit, please email [email protected]

Watch the Carnegie UK Trust’s new film, narrated by Michael Sheen: Speaking out for Fair Credit



The Carnegie UK Trust has focussed on identifying practical, sustainable alternatives for low-income households’ borrowing needs since the publication of the Gateway to Affordable Credit report in 2016. The Trust has made a formal commitment in the Scottish Government’s Fairer Scotland Action Plan to work with partners in Scotland to advance this agenda and convenes Scotland’s cross-sectoral Affordable Credit Action group, led by former Moderator of the General Assembly and Principal Clerk of the Church of Scotland, the Very Reverend Dr. John Chalmers.


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Photograph by Alan Morrison, ASM Media & PR


[1] Responsible Finance providers like Scotcash, Moneyline and Conduit Scotland and credit unions like 1st Alliance offer affordable credit products on a not-for-profit basis to disadvantaged customers groups at far lower rates than the commercial non-mainstream sector.