People across Wales are being urged to sign-up to a new banking facility which provides cheep loans for charitable organisations.

Charity Bank, the first not-for-profit banking facility, opened its doors to new business in Wales for the first time on Tuesday.

The facility - backed by the Charities Aid Foundation - serves charities which do not have access to mainstream lending facilities.

Malcolm Hayday wants people to invest

The Cardiff launch is part of a drive to encourage people to use the service to deposit a fraction of their savings into investing in good causes.

Money deposited with the organisation - which is the first general charity to be authorised as a bank - will only be used to fund charities and social enterprise in communities.

Chief Executive of Charity bank, Malcolm Hayday urged people to transfer some of their savings to the new bank as a way of helping good causes.

"In uncertain times, people often feel reluctant to give away cash they might need for a rainy day," he said.

Charity Bank encourages us all to think about the positive impact our money can have Malcolm Hayday, Charity Bank

"But we can overcome that problem because unlike a donation, a deposit with Charity Bank is invested, returned and invested again and again.

"And, you can get your money back. It's the ultimate in recycling resources.

"Charity Bank encourages us all to think about the positive impact our money can have whilst also making us think again about charities as enterprising creators of capital within communities, rather than as consumers of handouts," he said.

Research carried out by Charity Bank showed that people living in Wales have an average of nearly £3,700 in their savings.

It also showed that 26% of people in Wales feel guilty that they are not doing enough for good causes.

Favourable rates

Edwina Hart, Welsh Assembly Minister for Finance is hosting the launch of the bank at the Norwegian Church Arts Centre in Cardiff.

"Voluntary and community organisations throughout Wales now have a genuine new source finance from which they can secure loans at favourable rates," she said.

The bank was set up with the support of Chancellor Gordon Brown, is also backed by the High Street banks.

Depositors will have postal accounts, but no chequebooks.

They will receive a flat interest rate of 2% but will be able to waive it if they choose.

The bank will not be competing with commercial savings institutions.