£500k funding boost to deliver affordable family finance

Social Investment Scotland and The Robertson Trust lend £500,000 to Fair for You to help more Scottish households

Social Investment Scotland and The Robertson Trust have invested a total of half a million pounds into the pioneering ethical lender, Fair for You.
The combined funds will give 3,000 Scottish households the chance to help themselves out of poverty by increasing the availability and affordability of credit on essential household items, generating an annual saving of around £1.7m for those customers.
Fair For You is the only UK wide not-for-profit challenger to high cost credit providers. Founded in 2015 by Angela Clements, a qualified banker and formerly CEO of the largest community based credit union in the Midlands, it provides loans to families on a very tight budget, many of whom will be in low paid employment, for items such as washing machines, fridges, buggies and bunk beds.
Fair For You has a rapidly growing base of about 5,000 customers, including 750 customers across Scotland, who have collectively saved over £400,000 (about £580 per household) through the avoidance of high cost credit, additional hidden charges for warranties, insurance and installation and un-affordable penalties for late payments. That’s money that stays in the household to meet their rent or other bills, start to build up savings or spend on other essentials, often for their children; helping address the issues of poverty.
Many customers have previously had no alternative but to buy through rent-to-own stores and unscrupulous lenders because they have few savings and few options. According to the Financial Conduct Authority, around half of the people who have used rent-to-own companies have experienced some degree of late payment fees, with more than one in 10 thought to end up having their goods repossessed.
The loan finance investments of £250,000 from Social Investment Scotland, leading lender to Scotland’s third sector, and £250,000 from The Robertson Trust, the largest independent grant giving Trust in Scotland, have been secured in a joint funding round with Esme Fairbairn, Joseph Rowntree Foundation and Tudor Trust.
Social Investment Scotland’s funding comes from the £16M Social Growth Fund, managed by SIS, to provide loans to social enterprises and the third sector. To date, the fund has lent more than £6M to help 12 organisations increase their social impacts.
The Fair For You model fits strongly with The Robertson Trust’s social investment strategy and, in particular, its strategic funding strand to Strengthen Communities and build resilience within those living at the margins of society.
Alastair Davis, chief executive, Social Investment Scotland said: “Affordable credit has been a growing social problem in recent years. Families on low incomes have had little alternative but to use high cost lenders for renting or buying white goods, which all too often results in payment defaults and further financial hardship. Fair for You is helping to break this stranglehold by offering transparent and affordable credit solutions which benefits society’s poorest families and individuals in the UK. We’re delighted to be working with Angela and her team to help support the growth of this business in many of Scotland’s poorest communities, where access to low cost credit is so desperately needed.”
Kenneth Ferguson, Director of The Robertson Trust said: “We have been impressed with the business model Fair for You have brought to challenge the unscrupulous world of overpriced consumer lending.
“There is a great need for affordable credit options for Scotland’s low income families and The Robertson Trust is committed to supporting initiatives which reduce dependency on crisis services and help people find routes out of poverty.
“We believe this is reflected in our decision to invest in Fair for You and hope that its growth in Scotland will benefit those most in need of financial support.”
Angela Clements, CEO, Fair for You, said: “Fair for You has already made significant strides in helping low income families in England through our low cost credit products, so we’re confident that we’ll see similar levels of demand in Scotland. The investment from SIS will help us to meet that demand through the affordability and availability of finance, helping us to create a real and long-lasting contribution to alleviating poverty in Scotland.”