Written Statement by MS, Cabinet Secretary for Social Justice, Trefnydd and
Chief Whip
Financial services are not working for everyone. Increasing
numbers of people are excluded from mainstream finance, due to
costs and or circumstance, and are instead turning to
unaffordable options, leading to unmanageable debt.
There is an urgent need for creative solutions. I want to see a
financially inclusive Wales with accessible financial services
which meet people's needs.
This requires change - a joined up financial ecosystem that
supports referrals to appropriate products. I am clear we must do
things differently if we are to see a fairer financial system
work for everyone.
Welsh Government is leading on two urgent priorities to improve
financial inclusion in Wales.
The first is improving access to affordable credit to low-income
households.
Michael Sheen's recent documentary “Secret Million Pound
Giveaway” shone a light on the crippling unmanageable debt many
people find themselves in, and the need for more affordable
credit options.
In March I invested a further £1.3 million into the loan
expansion scheme established in 2022 to boost credit union
lending. This is helping people on that financial cliff
edge whose lives can be turned around by interventions like this.
The £2.9 million invested to date is having real impact across
Wales, increasing the capacity of credit unions to lend to those
who would be declined credit otherwise. To date this has enabled
over 4000 people access affordable credit. This continues to
grow.
Credit isn't the right solution for everyone, but affordable
credit is vital and must be available to low-income households
when needed. We all need to be alert to what happens when someone
seeking credit is declined an ethical option.
As the world changes around us – the closure of bank branches,
the economic climate and the acceleration of digital - it
reinforces the need for innovation and initiatives to keep face
to face services alive in communities, such as mobile
banking. In early April I will be attending the launch of
Celtic Credit Union's mobile branch service which will take
credit union services to communities right across Neath Port
Talbot and Swansea.
The second priority is to support collaboration and meaningful
partnerships between fin tech companies and high street banks and
institutions such as credit unions and CDFI's. Partnerships which
provide clear pathways to financial organisations better placed
to help customers declined credit, so they are not declined
twice.
To draw immediate attention to this, Welsh Government held a
second “Banking In Welsh Communities” event on 31st March which
considered how to better support financially excluded
people.
The Responsible Lenders Network, that I chair twice a year,
brings together all parts of the financial services and advice
landscape to find tailored solutions for Wales.
Finally, I am encouraged by the UK Government's priorities for
financial inclusion, with the newly established Access to Credit
Sub-Committee meeting for the first time in February to develop
ideas for improving access to credit. With representatives from a
range of financial institutions, including Cardiff & Vale
Credit Union and consumer groups, the Sub-Committee is one of
three set up as part of the Government's Financial
Inclusion Committee. The Welsh Government will continue
to seek to work closely with the UK Government to maximise our
collective impact on this important issue.
