Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of the introduction of an automated loans and decision programme for credit unions to support the modernisation process of those unions.
The Department for Work and Pensions’ Credit Union Expansion Project delivered an Automated Loans and Decision tool (ALD) which has been used by over 70 credit unions. The ALD has allowed credit unions to achieve up to 40% administrative savings on delivering loans and reduce provision for unpaid debt by over £1 million. There are also third party suppliers who offer these services on a commercial basis.
The government remains committed to supporting credit unions, which provide vital services to financially under-served communities and contribute to the diversity of the UK’s financial services sector.
At Autumn Budget 2018 the Chancellor announced a new £2 million challenge fund to promote innovative technological solutions from the UK’s Fintech sector to address challenges faced by social and community lenders, including credit unions. This will help support the continued development and modernisation of the credit union sector.