Cost of living: Boosting financial inclusion in Scotland aim of newly launched venture

A group of Scotland’s policy-makers and professionals from the private, charity, and not-for-profit sectors have united to create an organisation that expects to make a “significant difference” to those struggling to access fair or affordable financial services.

Financial Inclusion for Scotland has just been launched with the aim of supporting those who face barriers in being able to use free banking, affordable credit, and money-management services.

It is managed by Social Investment Scotland (SIS), and is formed of ten founding members from across the commercial and not-for-profit sectors –including Scottish Financial Enterprise, Fintech Scotland, the Money and Pensions Service, StepChange, Money Advice Scotland, and The Poverty Alliance – with a shared commitment of finding new ways to expand financial inclusion in Scotland.

Financial Inclusion for Scotland aims to pick up and progress the agenda from the Carnegie Working Group on Affordable Credit, which drew to a conclusion in 2021. The new venture is chaired by Stephen Pearson, a founding member of the Carnegie Trust Working Group, and a veteran of Scotland’s financial services industry with many years’ experience in promoting financial inclusion. Formerly of RBS Group and Virgin Money, he was also a trustee of the Virgin Money Foundation.

He retired from banking in 2019, and helped Fintech Snoop (which uses open banking technology to provide money-management tools) to build partnerships with financial wellbeing agencies, and he currently sits on the advisory board of salary-deduction lender Salary Finance, and has recently been appointed chair of Castle Community Bank, the Edinburgh-based credit union.

The launch of Financial Inclusion for Scotland comes amid the escalating cost-of-living crisis, and it cites evidence that use of unlicensed money lenders and loan sharks has increased since before the pandemic, while interest rates have just been raised to 2.25 per cent, putting further pressure on those that have borrowed from financial institutions.

Financial Inclusion for Scotland will be holding its first conference on November 9, with the Deputy First Minister John Swinney MSP confirmed as keynote speaker.

Stephen Pearson, chair of Financial Inclusion for Scotland, with Sharon MacPherson, CEO of Scotcash. Picture: contributed.

Mr Pearson said: “Enabling better financial inclusion should play a key role in an inclusive Scotland. The cost-of-living crisis has brought into sharp relief the huge struggles that many people in Scotland face managing their household budgets… we hope to find new ways to provide those who need it most with access to affordable credit, stigma-free debt advice, and smartphone money-management tools.

Innovative

"We also hope to stimulate fresh investment into this sector through new partnerships and more coherent policies, while developing practical and innovative solutions that can have a real impact on the ground. Our work has just begun – but I’m convinced we can make a significant difference as a collective.”

Alastair Davis, chief executive of SIS, said: “SIS has been supporting the expansion of affordable credit provision for more than 20 years, so we are delighted to be taking a leading role in helping to drive forward Scotland’s financial inclusion agenda.

"At a time when many people are struggling to pay for basic food and heating, a situation that will only worsen in the coming months, the role of [Community Development Finance Institutions] will become increasingly important. One of our key jobs at Financial Inclusion for Scotland is to look at innovative ways we can expand this vital market to provide a lifeline for communities across Scotland.”