Three of the country’s biggest high street banks are to trial community branches offering financial services to people with low credit ratings.
NatWest, Lloyds TSB and Barclays are working on the scheme at a time when major lenders face criticism for turning their backs on poorer customers.
Consumer groups are concerned about the introduction of new bank charges – such as paying utility bills over the counter – and the closure of high street bank branches, which penalise less profitable customers.
The Government is also keen to see the nation’s 4 million people without bank accounts given the chance to open one.
Salford University is co-ordinating the scheme, working with local councils, housing associations and local communities. The Government has pledged an initial £2m of regeneration funds.
The first financial products on offer will be loans.
A Barclays spokeswoman says: “We recognise we haven’t catered as well as we could have done for the poorer communities and we are testing the area for the first time. It could eventually lead to tailored current accounts.”
Lloyds TSB’s operation will be the first to go live, opening above one of its branches in Portsmouth in the new year. It will be called the Portsmouth Community Based Financial Institution.
Barclays will open a community centre in Salford in about 18 months’ time and NatWest has agreed to work on a third operation in East London.
see “News Analysis”