61,163 customers borrowed £235 million from the UK’s responsible finance providers in 2016-17, according to the new report “Responsible Finance: The industry in 2017”.
But the UK’s responsible finance providers could do more. The report calls for “fit-for-purpose” tax reliefs to incentivise greater investment into responsible finance providers, and a dedicated £150 million responsible finance fund and a guarantee that current EU facilities which incentivise commercial investment into the responsible finance industry, are replaced, or access is maintained.
Jennifer Tankard, Chief Executive of Responsible Finance, said, “Responsible finance providers are a critical source of finance helping social enterprises, businesses and micro enterprises contribute to employment and job creation, including in some of the most deprived parts of the UK.
“Social enterprises themselves, they are a crucial source of working capital, investment and support for the UK’s innovative social enterprises and businesses; 93% of business borrowers from responsible finance providers had been turned down by mainstream banks.
“And with millions of individuals now relying on credit to pay for essential household bills, and many high-cost lenders acting irresponsibly and preying on customers’ vulnerability, the support that “mission-driven” responsible finance providers offer is needed more than ever. They treat customers fairly, only lend to those who can afford to repay, are transparent about the costs of borrowing, and provide supportive services that help customers increase financial inclusion.”
The research describes how responsible finance is helping more people and businesses across Britain build their financial resilience – in 2017 the industry supported 34% more customers than in 2016.
“Responsible finance providers are recognised as trusted and transparent lenders offering considerable value for money in supporting businesses, social enterprises and individuals,” added Tankard. “With access to the right tools: funding; tax reliefs; guarantees and fit-for-purpose regulation; the industry can continue to grow to match the need for access to finance.”
Access the report on EMN's publications section.