SCOTTISH CREDIT UNION CAPACITY FUND
GUIDANCE NOTES
PLEASE READ THESE GUIDANCE NOTES BEFORE COMPLETING THE GRANT APPLICATION FORM
These guidance notes contain a lot of detailed information.
Please do not be put off by this - this guidance is intended to give you the best chance to put your case forward.
These Guidance Notes are also available in PDF format (188k)
PART A FUND BACKGROUND
1 Financial Inclusion - The Scottish Executive is committed to tackling financial exclusion. It is unacceptable that 13% of Scottish households have no financial products - twice the UK average. Our aim is to ensure that all Scottish people have access to suitable, inexpensive financial products.
2 Credit Unions - We feel that Credit unions are one such tool in tackling financial inclusion as they provide a good alternative to mainstream saving and borrowing, and some also offer additional services such as insurance products and help with budgeting.
The action plan for Scottish Credit Unions, Unlocking the Potential sets the way forward for the development of the Scottish movement. We want to help credit unions to become more self-supporting and increase their accessibility particularly in areas where people need their services most. To this end we have established the Scottish Credit Union Capacity Fund backed by up to
1.1 million.
This fund aims specifically to increase the capacity of credit unions throughout Scotland to tackle financial exclusion. We intend to award grants to credit unions that have clearly demonstrated that they are committed to increasing their membership, becoming sustainable, and providing services to help meet the needs of financially excluded people.
3 Fund Aim - To increase the capacity of Scottish Credit Unions as outlined in the 'Unlocking the Potential' action plan, by supporting sustainable credit unions with high potential to impact the target of 5% of the Scottish population being members of CUs by 2005.
We also intend to support established credit unions that can demonstrate a proven track record of building membership under their own steam and have the drive and ability to recruit and retain more members, and offer diverse services.
4 Applications - We anticipate one-off awards for premises, office refurbishment (i.e. IT equipment), local marketing strategies, increasing common bonds and mergers, or work to develop satellite points. Development funding will also be available for employing core credit union staff, e.g. managers, admin. assistants.
The applications that are successful will be those that demonstrate a clear, achievable target to significantly increase membership numbers, or extend the services available to members.
PART B THE FUND
1 Fund - the total fund is for up to 1.1 million and grants will be made of up to 60k. The minimum grant award will be 10k. The grants will normally be paid on a quarterly basis and with standard reporting requirements.
2 Timescales - Applications are invited at the launch of the scheme and decisions will be made on an ongoing basis. Those unsuccessful in the competitive grant scheme may also apply. There is no closing date for applications, however, all expenditure should be incurred by 31 March 2006, and as applications will be decided on a first-come basis, until the funding is exhausted, you should not delay in submitting your form.
3 Eligibility Criteria - The eligibility criteria are set out at part C of this guidance. Applications must satisfy the compulsory criteria to be eligible, and will then be considered against additional desirable criteria.
4 Decisions - The Scottish Executive will make award decisions using the evidence provided in the application form and the credit union's business plan, along with telephone or written follow-up if required. The Financial Inclusion team will visit short-listed applicants along with an independent consultant along with an independent consultant. Information provided may be verified with the FSA.
5 Evaluation and Monitoring - The Scottish Executive is committed to ensuring value for money and intends to measure the success of the funding by evaluating the successful applications. You are required to explain how you intend to monitor the project and how you will evaluate it in your bid. The exact terms of this monitoring will be agreed with individual successful applicants and will depend on the type and level of funding.
6 Help - If you need clarification on any part of this guidance or the application form, or if you have any questions at all regarding completing your form, please contact the policy team at the Scottish Executive on 0131 244 0807 in the first instance. You may wish to contact your trade association or development agency for help with drafting your application.
PART C FUND CRITERIA
1 Compulsory Criteria - The following compulsory criteria (a) - (g) MUST be satisfied:
(a) The applicant must be an established Scottish Credit Union (no study groups or feasibility studies for new credit unions).
(b) The credit union must be 100% FSA compliant.
(c) The application must be for between 10,000 and 60,000.
(d) State Aids Regulations must not be exceeded by this award.
(e) The credit union must have no fewer than 1000 existing members unless there is clear evidence of a significant membership increase within its own capacity.
(f) The credit union must have no greater than 5000 members.
(g) The application must meet the aims of the fund by being for a project which:
(i) aims to significantly increase the capacity of the credit union, for example by increasing membership numbers or improving services to members;
(ii) demonstrates that there is potential members within the credit union's common bond to achieve this, or that the proposal is to widen the common bond; and
(iii) includes a plan to sustain this development following this 2-year funding.
Applications for premises or office refurbishment
In addition, for applications for premises or office refurbishment the project must:
(iv) provide opening hours which meet the needs of the credit union's members and show how they will be significantly increased; and
(v) show clearly why any current premises are not suitable, and include detailed plans of the proposed premises including costs, location and three quotes.
NB - Criteria 1(d) state aids - All grants must conform to European State Aid regulations - therefore only credit unions that have received, or will receive, less than EUR 100,000 (approximately 60,000) of public funding over a 3-year rolling period can apply. Recent support via health checks and business planning provided by the trade associations/CEIS is exempt from State Aids Regulations.
Criteria 1(e) significant membership growth - The Scottish Executive will retain discretion on this criterion.
2 Desirable Criteria - We are particularly keen to support credit unions that can demonstrate the following desirable criteria:
(a) Financial inclusion - In its operating practices, or by the services it offers, it is demonstrating a commitment to people on low incomes or who may not have access to financial services.
(b) Sustainability - It is a sustainable, self-supporting CU that has not relied too heavily on public funding.
(c) Equal opportunities - Operates an equal opportunities policy.
(d) Track record - It has a proven track record of increasing membership under its own steam.
(e) Previous performance - Against national targets in 'Unlocking the Potential'.
(f) Sound management systems and that the Board of Directors, the Supervisory Committee and the Credit Committee are functioning effectively.
(g) Strategy - Proposals that demonstrate that they are a step towards achieving the long-term economic, social and environmental regeneration of their area will be encouraged.
(h) Other financial support - Priority will be given to credit unions that have other sources of support.
We intend to back proposals with clear, specific targets relating to recruiting and retaining new members and improving services to potential and existing members. This may take the form of increasing the common bond, moving to more suitable, visible premises or refurbishing existing premises, mergers, or employing paid staff to increase opening hours/market the CU, etc.
For further information contact:
Jane Rogerson
Scottish Executive Development Department
Social Inclusion Division
Area 2F
Victoria Quay
Edinburgh EH6 6QQ
0131 244 0094
or email:jane.rogerson@scotland.gsi.gov.uk
Additional copies of this guidance and the application form can be found at www.scotland.gov.uk/topics/people/social-inclusion or by calling the Social Inclusion Division on 0131 244 0064.