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:
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.
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.
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.
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.