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Financial Inclusion in London: Empowering Individuals and Businesses

Learn about the effects of financial exclusion in London and the challenges faced by disadvantaged individuals and businesses. Discover our business services, including free money and debt advice, access to bank accounts, microcredit business loans, and personal loans. Find out how we have adapted our products and services in response to the new economic climate and how we are working towards financial inclusion for all.

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Financial Inclusion in London: Empowering Individuals and Businesses

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  1. According to the FSA, Government and Financial Inclusion Taskforce • 10-15% of the adult population without access to bank accounts • 7-10 million with limited access to financial services • 12 million people use sub prime market in the UK • Sub prime market estimated value of £16 billion/year • 3-5m using doorstep lenders • 1m+ using pay day lenders

  2. Effects of financial exclusion in London • Lack of personal lending to disadvantaged groups • People face difficulty in raising finance to start or develop micro businesses • People and businesses living in underprivileged areas suffer more the exclusion • Debt problems affect a lot of poor people causing a spiral effect on their lives • The lack of financial literature programmes create a real barrier limiting ability in managing personal finance

  3. Our Business Service Cost to client Money and Debt Advice Free Access to bank accounts Free Microcredit Business Loans 19-12% Personal Loans 35-28% + 5%admin

  4. Statistics 2005/06- 2008/9 Total number of clients seen and supported 5000 Personal Loans Made (1200) £1,100,000 Microcredit Loans Made (130) £500,000 Bad Debt Rate 7% Debt Advice Given 1500 Overindebtedness managed £12m Bank Accounts opened 120 Savings for clients £450,000

  5. 2008 - 2009FINANCIAL CRISIS New categories of financially excluded Households In UK 143 properties have been repossessed per day in 2008; they will become 205 a day in 2009 Working class / self employed people More people is borrowing from Payday Lenders charging up to 1600% Small businesses The lack of access to finance has generated cash flow crisis to many small businesses

  6. Challenges of the new economic climate

  7. Products/services adaptation • More attention to exploited people • Consolidation of unfair and usurious loans • All 32 London Boroughs • Same services as before • Telephone advice services • Financially themed workshops • Assistance with applications to charitable funds/grants • Loans up to £10,000 (£20,000 after 1st year) • Strengthen relationships with business advisors • Focus assessment on current financial circumstances • Step disbursement loans • All 32 London Boroughs

  8. Lessons learnt • FF as Social enterprise look for solution in difficult times • Innovated new products and services • Consulted with stakeholders and clients to understand changing needs • Tightened existing systems and made more efficient • Couldn’t have done this change so quickly if primarily govt supported

  9. Riccardo Aguglia Microcredit Manager www.fairfinance.org.uk 47 Ben Jonson Road, Stepney, London E1 4SA 18 Ashwin Street, Dalston, E8 3DL T: 0207 780 1777 F: 0207 780 1999 E: Riccardo@fairfinance.org.uk

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