Transcript Tess Pendle Head of My Home Finance Why? Response to members concerns Needs of vulnerable tenants.

Tess Pendle
Head of My Home Finance
Why?
Response to members concerns
Needs of vulnerable tenants
The Credit Gap
Banks
Credit
Unions
Doorstep/Illegal
Member concerns
Debt spirals
Rent arrears
Health/social issues
Federation Response
 Solvent & sustainable social business
 Small sum (“micro”) lending
 Long-term financial plan
Not for Profit
“a social business...You are committed to
solving a social problem with no intention of
making personal financial gains. You cover all
costs through your operations so that your
business is self-sustaining”
Muhammad Yunus, May 2010 Grameen Bank founder & Nobel Peace Prize
Winner, 2006
Partners
HAs
DWP GF
Wates Giving
RBS
ELM
Governance
Independent CLG
Federation Founder Member
Board and Sounding Board
Launch
Launch
Pilot
Wolverhampton
Tamworth
Walsall
Erdington
Dudley
Birmingham City
Worcester
Northfield
Hereford
Coventry
38 Jobs
Services
Credit
Basic bank accounts
Savings accounts
Money advice
The cost of credit
today
Banks +
£6 to
Good credit
history
CDFIs/MHF
Home
Credit
(IML)
Loan Shark
£13 per
£100
£30 per
£100
£75 - £100
per £100
£100 + per
£100
Share based &
can’t take high risk
percentage
All high risk but
no further
subsidy
required
Credit
Union
High risk, face
to face,
flexible,
personal
Female, 30-40
yo, welfare
benefit, social
housing
Customer Relations
Building Credit Scoring
Flexibility in Payments
Personal Contact
Early repayment no penalties
Arrears collection
Process
Initial contact
Appointment
Interview
Decision
Payment
(Money advice)
Roll Out
Roll out
• North East/West
• Alternative delivery models
• Closer HA and stakeholder
involvement
So far…
Loans:
4,007
Average loan
£366
Aggregate lending
£1.2 million
Savings Accounts
46%
Demographics gender
Demographics - age
Demographics - ethnicity
Analysis/Impact
Typical MHF customer:
Borrows around £366
Currently repays £417
Better off by £249/year (against HC)
Analysis/Impact
Based on average loan £366
if borrowing taken out at £82/£100:
Total annual savings for clients roughly
£996,000
Thank you
[email protected]