Councillors have agreed to provide a grant of £50,000 to Northumberland Community Bank.
Northumberland Community Bank (NCB) was formed by the merger of existing entities, Tynedale Community Bank (TCB) and The Credit Union for South East Northumberland (CUSEN) in April 2017.
In the fullness of time, the joint bank is expected to grow to cover the whole of Northumberland.
The council was originally approached for a loan, but it was agreed to change this to a grant, subject to a signed grant agreement, which was approved by the cabinet at its meeting on Tuesday.
Coun Nick Oliver said: “It provides an extremely valuable service in Northumberland, one that we support and would like to see grow.
“They are growing sensibly but rapidly so we are working with them in many different ways.”
Coun John Riddle added: “I think it’s hugely important, it keeps people away from loan sharks, and with the advent of Universal Credit later this year, I think it will be very useful for tenants to put aside their rent and things like that so I’m very much in support.”