Fair finance

Working with housing providers to challenge high-cost lenders

STRATEGY

Image: Istock

Fionn Sharpe


Policy and strategy advisor, Fair4All Finance

Here at Fair4All Finance, we’re excited to be working with Campbell Tickell on a project to strengthen the links between social housing and community finance providers.

It is clear that both sectors hold common values and share a mission to improve the wellbeing of people in vulnerable circumstances. And we believe there is a real opportunity for more partnership working between the two.

So over the coming months we will be working with lenders and housing providers to explore the impact of these partnerships on tenants, identify the business case and develop practical resources to help housing associations and lenders deliver even more successful partnerships.

About Fair4All Finance

We are on a mission to increase the financial resilience and wellbeing of people in vulnerable circumstances. We know we can achieve this by improving the availability of fair and accessible financial products and services.

Our first area of focus has been on scaling-up the community finance sector to challenge the dominance of harmful high-cost lenders. We want to ensure that everyone who needs it has access to fair, appropriate and affordable credit.

Why affordable credit?

Community finance lenders, such as credit unions and community development finance institutions, provide a lifeline for people excluded from mainstream financial services. Fair and responsible credit allows people to meet the unexpected costs of life shocks, smooth their incomes or buy essential items that are otherwise unaffordable upfront.

Conversely, a lack of access can mean going without a fridge or a washing machine, or being unable to afford school uniforms or birthday presents for children. It is a far better option than the alternatives available to many renters, who make up 70% of payday loan users.

Affordable credit can save families hundreds or even thousands of pounds a year in repayments, compared to the rates charged by payday or doorstep lenders. And unlike high-cost lenders, responsible credit providers offer a holistic financial wellbeing service, with linked savings or insurance products that build customers’ financial resilience.

“Unlike high-cost lenders, responsible credit providers offer a holistic financial wellbeing service, with linked savings or insurance products that build customers’ financial resilience”

Opportunities to collaborate

We believe there are opportunities to build on some of the great work already happening in the social housing and community finance sectors. We will examine the impact of these partnerships on tenant wellbeing. How does access to an affordable credit option help tenants weather the financial impacts of life shocks? How can linked repay-and-save products help build their financial resilience?

We will also look at the business case of these partnerships for housing associations. What impact do they have on rent arrears, evictions and re-letting expenses? How do they support the aims of wider programmes run by social landlords to address social and financial issues in their communities?

Social and financial impact

A recent report on one of our partner organisations, Fair for You, demonstrates the wider social and financial impact that access to fair and affordable credit can achieve:

  • Fair for You generated £50 million of social impact over the past five years, including £2 million in savings to the NHS
  • They helped move 70% of customers away from high-cost credit, saving them an average of £30 a week
  • 60% of customers reported being better at keeping up with bills

Over 20 other customer impacts were identified, including healthier diets, better self-esteem and improved mental health.

How you can help us

We know that great partnerships already exist. We want to learn from them and identify where they have worked well, and where there have been barriers to growth. In the coming months, Fair4All Finance and Campbell Tickell will be engaging with the social housing sector to find examples of good practice, workshop solutions and identify new partnership opportunities.

The Campbell Tickell team will shortly be asking English housing associations to complete a questionnaire about current and potential partnerships with affordable lenders. If you would like to take part, please share your contact details here.

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