Greater collaboration between existing local finance organisations, such as responsible loan funds, credit unions and debt and money advice charities, could transform the lives of the millions of Britons excluded from mainstream financial services, according to new research from Responsible Finance.  Responsible Finance is the voice of the responsible finance industry, working to increase access to fair finance. It supports a strong and growing network of finance providers who are building resilient economies throughout the UK.

Tackling Financial Exclusion Through Local Finance Partnerships sets out a blueprint for successful partnerships that could be replicated across the UK. It provides a step by step approach to achieving the changes needed and is based on successful approaches in the USA.

Two million people do not have a bank account and nine million people do not have access to mainstream credit options.[1] So at least 14% of the UK’s population faces financial exclusion. This impacts on their ability to participate in the economy and build financial resilience through savings, for example.

Tackling financial exclusion and strengthening the UK’s financial capability does not require new entrants to the market. Existing finance and advice organisations with a local focus could strategically engage with each other to achieve far greater scale.

Locally-based finance organisations, such as credit unions, responsible loan funds and debt and money advice charities, offer access to advice, savings and affordable credit. They collectively reach over 3 million consumers and businesses each year.[2]

Tackling Financial Exclusion Through Local Finance Partnerships is available here. The research was based on interviews and focus groups with 22 finance providers.

[1] Financial Inclusion Commission (2015), Improving the Financial Health of the Nation, http://www.financialinclusioncommission.org.uk/report

[2] Based on figures from the Association of British Credit Unions Ltd. (https://www.findyourcreditunion.co.uk/about-credit-unions/),

Responsible Finance (http://responsiblefinance.org.uk/policy-research/annual-industry-report/),

Citizens Advice (https://www.citizensadvice.org.uk/Global/Migrated_Documents/corporate/money-advice-services.pdf), and the Money Advice Service (https://www.moneyadviceservice.org.uk/en/corporate/record-number-of-people-benefit-from-money-and-debt-advice) (all figures as of March 2017)