19 December 2022: Financial Times banking and fintech correspondent Siddharth (Sid) Venkataramakrishnan’s latest piece (published in the FT Future of Money newsletter and online) says:
“The not-for-profit world of CDFIs does not have the same rock star glam as consumer fintechs valued into the billions of dollars. But they play a vital role in supporting consumers who are unable to find credit from other sources.”
And Sid adds that their work goes well beyond this, providing financial education and support designed to help people boost their incomes (like free benefits checkers) and resilience – and that because this support is offered to their applicants, it is used by far more people than CDFI customers alone.
Citing data covering November 2022 provided by Responsible Finance members Conduit Loans, Fair Finance, Moneyline, Salad Money, Scotcash and Street UK, Sid explains that they gave bespoke and personal financial support to more than 30,000 people, a significantly larger figure than the 4,302 to whom they were able to grant loans in that month.
Sid quotes Theodora Hadjimichael, Responsible Finance CEO, within the article: “Community development financial institutions don’t just improve their customers’ financial situations: almost uniquely among credit providers, they are able to help people who apply to strengthen their finances, even if they cannot offer them a loan.”
His piece also quotes Sharon MacPherson, CEO of our member Scotcash, on the problems of racking up debt with Buy Now Pay Later providers. And Sid says CDFIs will be “central to helping those most at risk through the tough years ahead.”
Read the Financial Times article here: The rise and fall of payday lenders.
What next?
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