“The FCA’s bold new guidance on vulnerability and its particular emphasis on inclusive design are welcome developments that will improve outcomes for all financial services customers, not just those who are more susceptible to harm. In the wake of the destruction caused by Covid-19, which has pushed many more people into vulnerable circumstances, the guidance is a timely publication.
CDFIs take a proactive approach to understanding the nature and extent of vulnerability in their customer base, embed this in their policies and processes, and amongst all staff, to ensure they treat vulnerable customers fairly. Thanks to the new guidance this good practice should sweep across the rest of the financial services industry and create a cascade of positive customer outcomes.”
Theodora Hadjimichael, Chief Executive, Responsible Finance
CDFI customer case study
Scotcash customer Mary*, 29, lives with her young son in Glasgow. She earns between £10,000 and £12,000 per year from her part-time job working with people who have experienced homelessness and additions.
It’s a rewarding job but with a monthly salary of £800 to £1000, depending on overtime, any unexpected or large bills can be a big challenge. Mary first heard about Scotcash, a community development finance institution (CDFI) five years ago from a friend who, like her, is a Glasgow Housing Association (GHA) tenant – GHA had recommended Scotcash to Mary’s friend.
At the time Mary needed a small loan and visited Scotcash’s branch where she went through the application process with an advisor. “I had to submit bank statements and answer questions but the advisor went through everything with me and explained why Scotcash needed all the information.”
Since repaying her first £200 loan, Mary has typically borrowed from Scotcash either once or twice per year – now applying online through Scotcash’s website – and has always made all her repayments on time, “I’ve never had any late payments or had any issues repaying. I like to live and pay within my means.”
Her most recent loan, approved by Scotcash at the start of February 2021, was for £600: “I needed the money to get some work done on my car,” says Mary, “but after Christmas I didn’t have enough saved. Without my car I can’t get around or get to work.”
Mary says she turns to Scotcash once or twicer per year if she needs a loan because she like the fact it’s a responsible lender: “I know that if and when I need a loan Scotcash is there, and I like their approach. A couple of years ago I applied for £800 and their advisor went through everything with me and worked out that £500 was, at the time, the maximum amount they could lend me. They take the time to ensure I can afford the repayments – it’s much better, and cheaper, than the alternatives I could borrow from.”
* – name changed.