The Carnegie UK Trust’s Affordable Credit Working Group said access to credit in Scotland was “not a level playing field” and found credit was most expensive for those who could least afford it.

The highly respected group, consisting of representatives from across Scotland’s financial industries as well as the third and public sectors, has spent a year analysing financial inequality in Scotland.

It calls for a range of measures from investment in community finance and enabling workers to pay off debt via payroll, to Scottish Government leadership and facilitating access for Scotland’s poorest borrowers to basic bank accounts.

The group has published a series of 18 recommendations for government and industry to adopt in order to break down some of the barriers to accessing affordable credit.

Among it calls to action are for the Scottish Government to assign ministerial responsibility for financial inclusion and to identify additional, national investment to support the growth of Scotland’s credit unions with investment from trusts, foundations and commercial and social investors.

Jeremy Peat, co-chairman of the group and a former chief economist of RBS, said: “While the regulation of payday loans has reduced the supply of expensive credit, it has done little to affect demand for short term borrowing amongst the poorest members of society or to stimulate alternative sources of supply of credit. A step-change is needed because that demand is not going away.”

The group called for high street banks to allow borrowers to access basic bank accounts via local credit unions or community development financial institutions.

It also recommended that employers in Scotland partner with credit unions to make repaying credit union loans via payroll a standard workplace benefit.

Mr Peat said: “Basic bank accounts offer people access to a mainstream financial product and build their level of financial inclusion.

“With nine mainstream banks now offering free basic bank accounts, we would like to see them all accept applications from local community finance organisations who have assessed the appropriateness of the applicant and verified their identification.”

He added: “Enabling Scotland’s poorest people to repay credit union loans via payroll will provide the structure and support required to help them access more affordable loan products and improve their financial position.

“It would also grow the membership base of credit unions, helping them to expand their loan book and become more competitive as credit providers to disadvantaged groups.”

Social justice secretary, Alex Neil, said: “The Scottish Government welcomes the publication of the Carnegie report on affordable credit as we recognise financial inclusion and accessibility plays an important role in our efforts to reduce inequalities and create a fairer, more prosperous society.

“We want to ensure that people are able to borrow affordably and treated fairly, that they can access good financial and debt advice, that they have access to basic bank accounts, where appropriate, and are assisted with financial management.

“We are strongly supportive of community finance providers, and are already providing leadership in this area, including work to promote the credit union sector and grow their capacity in Scotland.”