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Rural Financial Inclusion and the Challenges
Involved

• Joe MacPhee
• Department for Sustainable Communities
• Comhairle nan Eilean Siar

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Rural Financial Inclusion Western Isles
experience

• Financial inclusion
• What does it look like in the Western Isles?
• Rural barriers
• Opportunities
• Western Isles sustainable change
• Issues and questions.

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Rural Financial Inclusion definition (1)
Financial exclusion can be defined as the
inability of individuals, groups and communities
to access and use appropriate and affordable
personal, business and organisational financial
products and services.
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(No Transcript)
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Rural Financial Inclusion definition (2)

• What this means for us in the Western Isles
• seeking ways to prevent financial exclusion from
  arising
• providing individuals and households with the
  advice, information and guidance needed to manage
  their way out of poverty and stay out
• being cleverer about the ways we get this help
  to people and doing so when it is most needed
• ensuring access to the products and services
  needed to underpin financial inclusion
• encouraging individuals to plan and manage their
  finances over the short and longer-term
• providing social enterprises with the advice,
  support and resources required to grow and create
  new opportunities
• its not just about poverty and the poor!

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Rural Financial Inclusion what does it look like
(1)

• What are the conditions we seek to change
  underpinning issues
• declining population 10 since 1991 young
  people in particular
• 26 of population is over the age of 60 - 23 for
  Scotland more pronounced in smaller communities
• over 15 of the population recognised as income
  deprived
• unemployment of 3.1 compared to 2.9 in Scotland
  
• but labour market characterised by seasonality,
  low income occupations and dependence on
  declining industries.

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Rural Financial Inclusion what does it look like
(2)

• What are the conditions we seek to change
  higher costs

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Rural Financial Inclusion what does it look like
(3)

• What are the conditions we seek to change the
  outcomes
• the average gross weekly salary in 2005 was
  380.5 - Scottish average was 411.7
• average Western Isles household income during
  2003 was 21,700 - Scottish average of 25,500
• heavier reliance on pensions 14 of income
  compared to 7 in Scotland
• highest levels of fuel poverty in Scotland, 24
  in 2005, more prominent in smaller communities
• CAB reported over 6,000 Benefits enquiries in
  2004/05 - 45 of these being Disability
  Benefits/Disabled Person Tax Credit constituting
  the single most frequent form of enquiry
• Money Advice had dealt with over 2,000 enquiries,
  taking on almost 600 crisis debt cases with
  6,000 worth of debt on average

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Rural Financial Inclusion rural barriers

• choice of and access to services more limited
  heightened by concern over post offices
• specialist support limited extra pressure on
  partners such as CAB
• both above exacerbated by costs of providing
  services in most remote and fragile communities
• local people not inclined to give information
  about themselves relating to finance
• scale/nature of communities precludes any
  targeting of services at too narrowly defined
  social groups
• financial wellbeing of young people migrating for
  education/work, without the support available to
  their mainland peers is a concern
• awareness of good practice in financial inclusion
  in a rural setting is very limited.

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Western Isles sustainable change (1)
Our action planning process
Understanding the nature and characteristics of
financial exclusion people and place
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Rural Financial Inclusion opportunities

• Western Isles has many natural advantages
• extremely vibrant voluntary sector can reach
  most vulnerable groups
• services know each other although we are aware
  that joint working can still improve
• staff involved in delivery as well as strategy
  closer to clients
• excellent broadband infrastructure can provide a
  platform for information and new services
• new Credit Union central to our plans
• understand and comfortable with the need for
  sustainable developments

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Western Isles sustainable change (2)
A joined-up approach key themes
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Western Isles sustainable change (3)
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Rural Financial Inclusion issues/questions

• to what extent are the conditions in the Western
  Isles different from more urban areas or other
  rural communities
• we have sought to avoid targeting specific
  communities or groups too explicitly to avoid
  stigmatisation is this the correct approach
• there is still a need to target vulnerable groups
  and we will do this through the voluntary sector
  is this achievable in other rural areas
• what role might information communication
  technology play in the financial inclusion agenda
  in rural communities
• we see social enterprise as a means of creating
  growth opportunities in a low income economy and
  this is part of our agenda would you agree
• what networks exist for sharing practice and
  learning on rural financial exclusion in Scotland
  and with other parts of the world?