Prize aims to make credit more affordable and accessible – and encourage fintech “innovators” to partner with community lenders.
A £2m challenge to encourage UK community lenders and fintechs to “work together to develop new, innovative solutions that make credit more accessible and affordable,” has been launched by Nesta Challenges in partnership with HM Treasury.
The Affordable Credit Challenge will support partnerships between UK community lenders and fintechs to develop innovative technological solutions that will increase access to affordable, responsible credit. The Challenge is backed by HM Treasury and delivered by Nesta Challenges.
Development grants of between £125,000 to £150,000 will be awarded to up to six community lender/fintech partnerships seeking to develop the most impactful solutions in November 2019.
From these, three winning partnerships will each receive cash prizes of at least £200,000 in Spring 2020.
Economic Secretary to the Treasury, John Glen MP, said: “Most of us will rely on borrowing of one form or another during our lives, whether through loans, credit cards or a mortgage. However, millions of people struggle to access fair and affordable credit.
“I want to see more people benefit from the transformative power of digital technology, which is why we have launched the Affordable Credit Challenge. This is a vital opportunity for fintechs to work with community lenders to give more people control over their money.”
Three quarters (75%) of people surveyed on behalf of Nesta Challenges agree that not-for-profit lenders need more support to succeed and “the Affordable Credit Challenge is designed to do just that,” according to Nesta Challenges.
Chris Gorst, Head of Better Markets, Nesta Challenges, said: “Technology is already transforming how we manage our money every day, but our trusted community institutions – like the local credit union – have fallen behind in the use of technology. This means they often struggle to reach customers or compete with the speed and convenience offered by high-cost lenders. It’s now time for the fintech innovators to unite with social lenders and transform the personal lending market for the better.
“We’re not only excited that the Affordable Credit Challenge will accelerate much-need innovation in community lending, but that it will ultimately make it easier for people up and down the country to access safe, affordable and responsible credit when they need it.”
Applications close on 29 September 2019. Find out more here.