Fresh funding for financial inclusion, banking industry told

Thu, 15 Mar 2007

The government has put the banking industry on alert after confirming it will continue to provide financing support to help battle financial exclusion.

This week, Ed Balls, economic secretary to the Treasury, announced that the government would now back the Financial Inclusion Fund until 2011.

At the same time, he also unveiled plans to create a new taskforce with a remit to ensure that the UK is meeting its targets to promote financial inclusion to people from less affluent backgrounds.

Teresa Perchard, director of policy for financing support specialist Citizens Advice, welcomed the news.

"We know that the government is committed to maintaining its level of action to promote financial inclusion and we hope this will reduce debt and help people manage money effectively," she said.

Measures to promote financial inclusion may include encouraging people with a poor credit rating to open a basic banking account, which typically offer banking services without provision for an overdraft.

This could enable them to gain access to services such as a bad credit history credit card, instead of making them rely upon loan sharks or other non-regulated borrowing options.

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