EDINBURGH, Scotland – After three years of negotiation, the Scottish Executive and the European Union Commission reached an agreement that allows credit unions to receive and use public funding. The monies will be used to tackle the problem of financial exclusion, the 13% of Scottish households that have no access to financial services. The Scottish Executive is the name of the parliament, established in 1999. Many factors contribute the problems that the new ruling is intended to help. Scotland’s unemployment, for example, is in the 5% range. In addition, the country’s population is both declining and aging. High debts exacerbate to the problem. Over 180,000 inquires on debt-related problems were received last year by the Citizens Advice Bureau (CAB), a national organization providing consumer information free of charge. Scottish personal debt is estimated to be at 95 billion (US$173 billion). CAB says that their clients are struggling to repay debts almost 12 times their monthly salary. To oversee the distribution of funds, the Scottish Executive will develop the Service of General Economic Interest (SGEI) scheme to prepare standards under the Debt Arrangement and Attachment Act. Although the Scottish Executive is providing 3 million (US$5.4 million) in funding for money advisers throughout Scotland, they are also looking to credit unions to help not just in counseling but in offering affordable financial products. The Scottish Credit Union Capacity Fund has been backed with 1.1 million (US$2 million) to be used for business and compliance training to any credit union that wants it. Funds can be used for security equipment, IT equipment and new development personnel. “I know that credit unions have a fantastic potential for serving low-income communities and I am delighted to have reached this agreement with the Commission. This decision will enable credit unions to provide the simple, transparent, low cost financial products that their members need and importantly to receive increased financial support from public funders,” Deputy Communities Minister Johann Lamont, who was active in the negotiations, said.

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