Christmas always pulls on the purse strings with the cost of presents and higher utility bills to combat the cold making it even harder to make ends meet.
For many of the 15 million adults who can’t access mainstream credit due to a low, fluctuating or benefit-based income, that could mean turning to high-cost lenders.
With hire purchase giant BrightHouse ordered to repay customers £14.8million in October after the Financial Conduct Authority ruled that the firm failed to act as a “responsible lender”, Fair For You is leading the challenge against these lenders and received a £1m loan from Big Issue Invest in November to support them in their fight.
We believe that having to purchase a fridge, cooker, cot or bunk beds on credit should not mean you pay several times what other people do just because they can pay outright
The Big Issue’s social investment arm made the loan to the not-for-profit ethical lender from the Big Issue Invest Social Enterprise Investment Fund II (SEIF II), a £23.8m investment fund that has already seen £8m invested into 21 social enterprises.
The capital will help Fair For You offer flexible responsive payment plans and encourage customer feedback to improve the way services are delivered, providing access to affordable credit. The lender aims to offer a viable alternative by avoiding hidden fees and championing transparency and a respectful approach to all of their customers.
The Centre for Responsible Credit recently found that each time Fair for You provided a loan, the customer saved over £500 in comparison with using other pay weekly stores. They estimate that to date they have reduced the poverty premium by over £6m.