Fair4All Finance and My Community Bank (MCB) have agreed a new £150k investment to increase the supply of affordable credit provided to people in vulnerable circumstances.
This investment is the latest from Fair4All Finance’s Affordable Credit Scale-Up Programme, designed to increase the supply of affordable credit for people in financially vulnerable circumstances.
The two organisations will work together to introduce a new affordable loan product targeted at MCB customers on lower incomes, through price comparison websites – a route of access that’s currently underused in the affordable credit market.
MCB and Fair4All Finance will use an initial ‘pre-pilot’ phase to also test elements of MCB’s product, process and technology that could be applicable to other lenders in the sector, including:
- Loan origination for customers in vulnerable circumstances, through a network of price comparison websites typically used for mainstream finance
- Straight through loan processing from application to disbursement
- Application of advanced technologies that aren’t widely used in the community finance sector, like smart decisioning, data analytics, and flexible and fast payment tools
This phase will be used to collect best practice advice for other community finance lenders and to test the issuing and processing of consolidation loans – an important product area to grow during the cost of living crisis and a time of increased interest.
Should this ‘pre-pilot’ phase be successful, Fair4All Finance will commit a further £350k to expand the programme
Holly Piper, Investment Director at Fair4All Finance said:
‘With at least 17.5m people in financially vulnerable circumstances across the country, it’s important that we increase access to fair and affordable solutions that can help people build their financial resilience.
‘My Community Bank is a large and fast-growing community finance provider that is built for scale with its efficient customer acquisition route, automated lending system and advanced technology system on par with commercial lenders. We’re delighted to be working with them to pilot a product that could significantly increase access to affordable credit through price comparison websites.’
David Hendrick, CEO at My Community Bank said:
‘We share many common values with Fair4All Finance and are delighted to be working with them on this project. Both we and Fair4All Finance are Not for Profit entities who exist to improve people’s financial wellbeing, and both entities have a great deal to offer for underserved communities.
“This funding allows us to further widen access to affordable finance for underserved communities and further improve the financial health of our membership. We look forward to a long partnership with Fair4All Finance which will be of great benefit to our members and the wider community”.