Responsible Finance, Carnegie UK Trust, Turn2us, Yunus Centre for Social Business & Health, Centre for Responsible Credit, Finance Innovation Lab and Community Finance Solutions send joint letter to Chancellor
Charities addressing poverty, financial inclusion campaigners, academics, researchers and affordable credit providers have addressed a joint letter to the Chancellor offering support to local authorities in the delivery of emergency hardship funds to households at risk of slipping into destitution.
Responsible Finance represents community development finance institutions (CDFIs), which have decades of experience working with people in vulnerable circumstances to help them stabilise and improve their financial wellbeing.
Its letter, co-signed by other respected organisations, offered the sector’s robust and agile infrastructure to help the government and local authorities efficiently reach and deliver support to those individuals and families most at risk of financial hardship due to Covid-19.
The letter recommends:
• The launch of a follow-on emergency hardship fund to cover basic needs (in addition to the hardship fund announced at the Budget). This would be directed to the most vulnerable households; grants would help to pay for basic essentials, and would aim to relieve the most severe and immediate financial impacts of the pandemic.
• HM Treasury to bring forward the No Interest Loans Scheme (NILS) proposal. Once the financial landscape in the UK begins to stabilise, some consumers may be able to afford to take on new loans but at zero interest. CDFIs and other affordable credit providers are ideal delivery partners for HM Treasury to deliver the no-interest loans scheme to individuals in need. A grant from HM Treasury would provide capital for the pilot, incentivising other sources to match it.
Theodora Hadjimichael, Chief Executive of Responsible Finance, said:
“The long-term benefit of supporting vulnerable families at this time of crisis will have far reaching consequences, particularly for the children of these families. These individuals face an uncertain and daunting financial future; they need the right support delivered by a fair and trusted source. We do not feel it is appropriate for low-income households to borrow and incur debt at this time given they cannot repay it.
“We are offering our tried and tested infrastructure to help the government and local authorities deliver support to people most at risk of financial hardship due to Covid-19, efficiently and effectively.”
The letter is co-signed by:
• Theodora Hadjimichael, Chief Executive of Responsible Finance
• Thomas Lawson, Chief Executive, Turn2us
• Sarah Davidson, Chief Executive, Carnegie UK Trust,
• Damon Gibbons, Director, Centre for Responsible Credit
• Anna Laycock, CEO, Finance Innovation Lab
• Prof Cam Donaldson, Yunus Chair and Pro Vice Chancellor Research, and Dr Olga Biosca, Reader, Yunus Centre for Social Business & Health, Glasgow Caledonian University
• Dr Pål Vik, Director, Community Finance Solutions, University of Salford
What next?
- Theodora Hadjimichael (Chief Executive of Responsible Finance) is available for comment. For interview requests, please contact Jamie Veitch on 07904 272 200 / [email protected]
- Read the letter here.