Updated July 2012
The Growth Fund
Modernising and expanding the third sector
The lack of affordable credit for the financially excluded (people on low incomes in deprived areas) has long been a source of concern for Government, and community-focussed organisations. Although DWP offers budgeting and crisis loans through the Social Fund, this lack of affordable credit often means that financially excluded people turn to high cost doorstep lenders and even illegal loan sharks which can result in spiralling debt problems.
In 2004, government announced the Growth Fund to increase the availability of affordable personal loans via third sector (not-for-profit) lenders such as credit unions and community development finance institutions. HM Treasury invited DWP to administer the Growth Fund.
The Financial Inclusion Fund, which paid for the Growth Fund, ended March 2011. A full evaluation of the Growth Fund is available on the HM Treasury website.
Credit unions have made substantial progress in recent years to increase access to financial services and loans to people on lower incomes, but more can be done to secure credit union expansion and modernisation to the point where they serve a million more people and become sustainable.
We are continuing to support Financial Inclusion through the modernisation and expansion of credit unions. You can find out more about this in our pages on: