Innovation in Affordable Credit: finalists announced
Last week, Nesta Challenges announced the six partnerships between fintechs and community lenders that have secured £150,000 each in funding to develop innovative solutions that make credit more accessible and affordable.
Run by Nesta Challenges in partnership with HM Treasury, the Affordable Credit Challenge is a £1.5m prize that encourages UK fintechs and community lenders - such as credit unions – to work together to ensure people can access alternatives to high-cost-short-term credit.
Out of the 41 entries received from partnerships of fintechs and lenders, the judging panel – made up of experts from the fintech and community lending industries – selected the six most promising concepts to move onto the final round. Each team has been awarded up to £150,000 to develop its innovation over the next five months. The finalists are:
- Capital Credit Union, Nivo and Soar
- Central Liverpool Credit Union and NestEgg
- Hoot Credit Union and Incuto
- Fair for You and EML & Lending Metrics
- Police Credit Union and Credit Kudos
- Salad Money and Credit Kudos
Chris Gorst, Head of Better Markets at Nesta Challenges, said: “We’ve been delighted to see so many fintechs and social lenders uniting to develop innovative ideas to transform the personal lending market for the better. We’re looking forward to working with the finalists to make their concepts a reality and, ultimately, making it easier for people to access affordable, responsible credit when they need it.”
Eileen Halligan, CEO at Central Liverpool Credit Union, said: “We are delighted to be finalists in the Affordable Credit Challenge. Community lenders, relying on traditional credit bureau data, are having to decline borrowers considered marginally too risky to be offered credit.
“We believe our work with NestEgg, to develop user-friendly financial health indicators, will allow us to make better informed and fairer lending decisions. More importantly, reflecting back the financial health indicators to the consumer enables our members to take control of their spending, helping them make informed choices and widens access to affordable credit."
David Batten, CEO of Hoot Credit Union and Chair of Credit Unions for Greater Manchester, says, "We are delighted to have been successful in our bid for funding from Nesta Challenges. This will help us progress this exciting project challenging payday lenders. By developing a new online lending brand, with attractive and socially responsible loan products, accessed through a simple application process with immediate decision making, we will bring the benefits of credit union loans to those who need them most, when they need them most.”
Over the next five months, the finalists will work with Nesta Challenges and HM Treasury to develop its solutions, also receiving non-financial support. Three of the finalists will go on to be named winners in spring 2020, receiving a further £200,000 each to invest in their idea.
You can read more details about each partnership and its innovative ideas on the Nesta Challenges website here.