Credit unions were previously restricted to providing financial services to individual members, but are now able to choose to lend to small companies, many of which may have been unable to access funding through traditional mainstream financial service providers.

Paul McFarlane, head of operations at Glasgow Credit Union, believes the new legislation could help boost the country’s falling business start-up rate.

He says, ‘The number of new businesses in the UK are continuing to fall each year. Here in Scotland they have fallen by 13 per cent over the past year, with many fledgling entrepreneurs citing access to funding as a major barrier to starting up.

‘The changes in legislation mean those struggling to start up, or those small firms who are struggling to survive due to cash flow problems, have a potential extra financial lifeline to help boost their business.’

Mcfarlane adds that only 1.5 per cent of the UK population are members of credit unions. ‘The legislative changes will help the country’s credit unions begin to emulate the success stories of their worldwide counterparts.’