Date lodged: 28 June 2017
To ask the Scottish Government what its response is to concerns that individuals with poor or no credit ratings, including unemployed people and students with debt, are unable to access funding to take forward their business ideas, including loan funding offered through the Scottish Microfinance Fund.
Answered by: Paul Wheelhouse 28 July 2017
The Scottish Microfinance Fund aim is to provide access to affordable business finance for those with viable business propositions but who are unable to obtain finance, either wholly or in part, from mainstream lenders. Responsible lending is at the core of the Fund and individuals need to demonstrate the ability to maintain payments over the period of the loan. To date, the Fund has provided £925,141 of loans creating 131 new jobs and safeguarding 37 existing jobs.
The Scottish Government recognises the challenges those with a low credit rating can face when trying to source finance and is working hard to address this and to promote financial inclusion. That is why our Fairer Scotland Action Plan, published in October 2016, set out a commitment to making affordable credit more easily available. We are working together with Carnegie UK to deliver this commitment through their Affordable Credit Action Group, which has cross-sectoral membership, including from the banking sector, and a remit to deliver Carnegie’s Fairer Scotland Pledge to help Scotland’s not-for-profit affordable credit providers to grow, to reach many more people, building financial capability and improving wellbeing.