Strategy Development & Cross-Sector Collaboration
Too many customers in the UK are drawn to use high cost credit (e.g. payday loans) due to lack of available alternatives. It is generally the most financially vulnerable customers who end up using these products, paying a much higher price than other people to access money. There is an urgent need to build up the market for affordable lenders to offer a fairer alternative source of credit to these customers.
Fair4All Finance is a new organisation founded in 2019 to support the financial wellbeing of the most vulnerable groups in society. It was established out of the government’s commitment to allocate dormant assets money to help improve financial inclusion. Aleron worked with Fair4All Finance and the Esmee Fairbairn Foundation to develop a sector-wide theory of change for the affordable credit sector.
We conducted an evidence-based literature review into the size and state of the affordable credit markets and the key consumer factors influencing decisions about credit usage. On the back of this research we facilitated a series of workshops with Fair4All Finance and around 35 leaders, experts and affordable credit providers from around the United Kingdom. Together we helped develop a collective view on how to achieve change to grow the size of the affordable credit market. The theory of change outlines the key challenges facing the affordable credit sector and the levers available to achieve change. It sets out the roles that need to be played by a range of actors across the affordable credit sector.
The theory of change we have developed will be used to guide future action to tackle this complex problem. The end product is a shared strategy for the affordable credit sector that will be used to drive the agenda of Fair4All Finance and ensure a joined-up approach to achieving change across all players.
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