A Glasgow-based service is transforming the lives of thousands of low-income families by offering access to credit at a fair price – together with free money advice and support.

An independent evaluation by the University of Sheffield has concluded that Scotcash is one of the most successful institutions in the UK at easing financial exclusion among the poorest people in inner city areas.

The study shows Scotcash is providing a ladder out of poverty for families who would otherwise continue using expensive doorstep lenders because they are unable to access high-street loans or bank services.

The study, which was conducted over a two-year period by Professor Paul Mosley, found that people who used Scotcash services:

• Were more likely to stop using home or doorstep credit with the numbers using home credit falling from one third to one fifth

• Saw their household income rise on average by 19 per cent

• Adopted a ‘savings habit’ with average savings increasing from £58 to £102

• Suffered less worry and stress as a result of getting their finances under control.

Professor Mosley said: “Over its short life so far, Scotcash has been one of the most successful UK institutions working in the field of financial inclusion. It just shows what can be done by focusing on the basics, which are strict loan discipline coupled with sympathetic support and practical advice enabling clients to achieve control over their debts.”

Scotcash, known as a Community Development Financial Institution (CDFI), was launched in January 2007. The service is supported by Glasgow City Council, Glasgow Housing Association and the Royal Bank of Scotland and receives support from the DWP Growth Fund.


Clients are typically unable to access a bank or credit union loan and may already have used, or are at risk of using, a loan shark or doorstep lender with crippling interest rates.

The service, based in High Street in Glasgow city centre, helps break the spiral of high-cost borrowing and poverty by offering loans at a fair price alongside money advice and support tailored to each individual. So far it has made 4000 loans to vulnerable families and helped 1033 people open basic bank accounts.

Scotcash has also brought a £3million benefit to the wider economy, a combination of assisting access to additional welfare benefits, money advice intervention and savings on interest payments.

Scotcash Manager Leah Cameron said: “Most of the people who come to us just can’t access high-street banks or credit unions. Often they are slipping further and further into debt because they have nowhere else to go other than doorstep lenders. Many are distressed and don’t know how to get out of the situation they are in.

“By offering our clients support and advice, as well as loans at a fair price, they can start to get their finances under control again.”

Many Scotcash clients are single parents, living in rented accommodation and dependent on benefits. Average incomes are below the poverty line and few have any assets such as an owned home or car.

The three most popular reasons for taking out a Scotcash loan is home redecoration and household goods, Christmas presents and help to finance a short break away for the children.

Chair of the Scotcash Board, Steve Inch said: “I think most people will understand that, once you are in debt – whether that is to a bank or being in arrears with rent and bills – it can be pretty difficult to get back on an even keel.

“What they might not appreciate, unless they have been in the situation themselves, is how much harder it can be for those in deep poverty, who often don’t even have access to normal banking.

“The people in our communities in most need of advice and support are also those most likely to fall prey to loan sharks and doorstep lenders, and the least able to break free. That’s certainly not a situation that is unique to Glasgow but, for the moment, Scotcash is.

“Uniquely, we can offer people positive choices and help them break down the financial barriers that make them feel excluded within their own communities.”

GHA Executive Director of Development and Regeneration Alex McGuire said: “Scotcash is providing a vital lifeline to thousands of families who simply would not be able to get out of debt or escape the poverty trap otherwise. We are delighted to support this initiative which is leading the way in Britain on reducing financial exclusion.”

Council leader Cllr Gordon Matheson said: “One of the Council’s key priorities is targeted support of Glasgow’s most vulnerable citizens – and Scotcash is a perfect example of how, working together, partners can help stop financially vulnerable people spiralling into a world of bad debts.

“These services, and also the advice available to customers, are indispensable; particularly when many people are facing hardship.

“These are the very times at which people may come under increased pressure to turn to doorstep lenders and home credit – but Scotcash gives them a much better alternative.”

(GK)