Ten years ago I ran a focus group of low income borrowers to understand the impact the Government’s Growth Fund initiative had on credit union members. What suprised me was how much borrowers were willing to pay for convenience of service. I’d assumed that lower interest rates and weekly payments were enough. Removing friction in … Read moreSatsuma goes pear-shaped (slick customer experience isn’t enough)
5 million people were declined for credit last year. Many for good reason; 1/4 of applicants were in financial difficulty. 10% were ‘just surviving’. However 42% were what the Financial Conduct Authority calls ‘financially resilient’. These applicants have savings, insurance and a pension. 7% had assets of £50,000. 8% earn more than £50,000. One in … Read moreGood loan applicants are being turned away
The data we use for lending decisions in the UK is out of sync with modern realities. Such a narrow approach financially excludes people on higher incomes, losing lenders valuable income. It is ironic that the most digitally included are becoming the new financially excluded. Credit reference agencies scoring systems tend to dislike tenants, especially … Read moreDigitally included but financially excluded?