The government has pledged £6 million to support the growth and development of credit unions in areas that need them.

In a move that was welcomed by the Association of British Credit Unions (Abcul), the government said that some of the money would also be used to support the new credit union basic current accounts system.

Mark Lyonette, chief executive of Abcul, said he was "delighted" at the news and said it was a good move for consumers.

"This is a further demonstration by the Government of its commitment to the good work that our sector is doing in making affordable credit and banking services available to the financially excluded," he added.

The funding was announced by Economic Secretary to the Treasury Ed Balls as he launched the government's financial inclusion proposals today.

"Tackling financial exclusion is essential for both our economic prosperity and for social justice," he said.

Credit union current accounts were launched this month as part of a drive to increase access to basic banking services.

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