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Bridging the Credit Gap: Financial Inclusion for Disadvantaged Communities

Representing over 1,000 members, this initiative aims to provide financial services to 2 million homes experiencing financial exclusion. Offering credit, banking, and advice, it addresses debt spirals, rent arrears, and health issues. Launching in multiple cities, the focus is on long-term financial planning. With an average loan amount of £340, the program has already lent £3.3m, benefiting households and encouraging savings. Future plans include a ‘one-stop shop’ model and a loan note offer at 6% for five years. For more information, contact tess.pendle@housing.org.uk.

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Bridging the Credit Gap: Financial Inclusion for Disadvantaged Communities

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  1. Represents English HAs • 1,000 members (99% coverage) • 2 million homes for 5m disadvantaged

  2. Financial exclusion • No access to mainstream finance • No credit history • No affordable answer to urgent needs • Must borrow from high cost lenders

  3. Consumer borrowing

  4. The Credit Gap Banks Credit unions Doorstep/payday/ illegal

  5. Member concerns • Debt spirals • Rent arrears • Health/social issues

  6. Federation Response • National, sustainable social business • Small sum lending & allied services • Long-term financial plan

  7. Launch Launch

  8. Shops Wolverhampton Birmingham City Worcester Northfield Hereford Coventry

  9. Services • Credit • Basic bank accounts • Savings accounts • Money advice

  10. Process • Initial contact • Appointment • Interview • Decision • Disbursement • Money advice

  11. The annual cost of credit

  12. Partners Housing Associations

  13. So far… • Loans: 9,800 • Average loan: 340 • Aggregate lending: £3.3m • Est. aggregate savings: > £2m

  14. Savings Accounts 46%

  15. Age

  16. Household make up

  17. Future plans • Consolidate WM • Roll out • Refine model • ‘One-stop shop’

  18. Future plans • Capitalisation • Loan note offer • 5 years at 6% • Dual return

  19. Thank you tess.pendle@housing.org.uk

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