Who are the Affordable Credit Challenge winners helping the UK access fair credit?

  • Seoana Sherry-Brennan

    Seoana Sherry-Brennan

    Digital Communications and Prize Engagement Officer

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After nine months of searching for the organisations who are helping to create a better personal lending market in the UK, we are pleased to reveal the winners of the Affordable Credit Challenge!

Three partnerships between community lenders and fintechs have secured a cash prize of £200,000 each for developing innovative solutions that make credit more accessible and affordable. The cash prize is part of our £2m Affordable Credit Challenge, which kicked off in July last year in partnership with HM Treasury. It enabled community lenders to join forces with tech-savvy fintechs to work in partnership to provide people with alternative fair solutions to high cost lenders.

The Economic Secretary to the Treasury, John Glen, said:

“The UK’s world-leading fintech sector has a huge role to play in helping the most vulnerable access alternatives to high cost credit. That’s why we set up the Affordable Credit Challenge, bringing together fintechs and community lenders to develop new, pioneering solutions to this challenge. The three winners, announced at Budget, have done amazing work and I look forward to seeing how they help more people to access affordable credit products.” 

Research conducted to mark the launch of the Challenge revealed eight in ten (82%) people think more needs to be done to ensure there are alternatives to high-cost lenders and 75% believe not-for-profit, community lenders need more support to succeed. 

The three winning partnerships have highly credible and effective solutions which all have the potential to impact many financially vulnerable people across the UK who use credit to pay for everyday household expenses, and often struggle to access fair, affordable credit. The winning partnerships are:

Capital Credit Union with Nivo and Soar

A mobile app using the latest digital financial technology to make it easier for people to join and engage with a credit union, giving new audiences – particularly financially excluded and younger people – the opportunity to save and gain access to affordable credit.

Fair for You with EML and Lending Metrics

A revolving loan facility to provide buffer credit specifically for an additional frozen food shop in school holidays, when low income households often using high cost short term credit to cover spikes in grocery costs when children do not have school dinners provided. A pilot is being trialled with a leading supermarket. 

Police Credit Union with Credit Kudos

A reward loan solution that uses open banking to monitor a borrower’s behaviour and reduce the interest rate they pay over time as they develop healthy financial habits – helping those in the police, armed forces and other protective services with a poor credit rating to access affordable credit.

“I believe we will see the beginning of a transformation in the personal lending market to support those who need it most”

Chris Gorst, Head of Better Markets at Nesta Challenges

The winners were chosen from six finalists who, as well as being given an initial grant of £150,000, have also been supported by us and HM Treasury to develop their solutions by providing non-financial assistance such as network events and legal support.

Research conducted to mark the launch of the Challenge revealed eight in ten (82%) people think more needs to be done to ensure there are alternatives to high-cost lenders and 75% believe not-for-profit, community lenders need more support to succeed. 

Chris Gorst, Head of Better Markets at Nesta Challenges, said:

“The three winning partnerships are great examples of how technology can remove some of the barriers that currently prevent community lenders widening access to affordable and fair credit. Social lenders haven’t historically been able to compete with high-cost alternatives on speed or reach and uniting with fintechs addresses this issue. As these partnerships are becoming a reality, I believe we will see the beginning of a transformation in the personal lending market to support those who need it most.”

For more information, visit affordablecreditchallenge.com/ 

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