New research reveals 45,000 people finding real alternative to payday lenders.
New research reveals rapid growth in alternative lenders market in 2015:
- 45% rise in loans by growing network of responsible lenders
- 10,000 new businesses and 25,000 jobs created
- 45,000 people find ethical alternative to payday lenders
The ethical loans market, seen as a real alternative to traditional banking, has experienced a rapid rise over the last year, with over £250 million of loans creating 10,000 new businesses and 25,000 jobs across the UK. That’s according to new research by Responsible Finance, the membership organisation for ethical lenders.
The research reveals that this has been a record year for the responsible lending market, with a 45% rise in lending to small businesses, social enterprises and local communities. The findings show that for every £1 lent by ethical providers, £7 of value is added to the economy. The research also highlights that over 45,000 people used ethical loans as an alternative to high interest payday loans.
Responsible Finance predicts that its members will lend a further £1.9 billion by 2020, supporting 75,000 more businesses and helping 360,000 more people avoid high interest lenders.
Charity Bank is an ethical bank and Responsible Finance provider with a mission to use money for good. Uniquely it uses the money its savers entrust to it to make loans solely to charities and social enterprises. Since 2002, Charity Bank has issued loan approvals of over £240 million to charities and social enterprises.
Ben Hughes, Chief Executive of Responsible Finance said:
“We know that too many people can’t access affordable and fair finance, denying them economic and social opportunities. Responsible lenders are combatting this by investing in record numbers of people, places and businesses. In the last year they have delivered over £250 million in loans across Britain’s towns and cities, which is creating opportunities, boosting enterprise and fuelling growth.
It is absolutely vital that the Government continues to support this new and developing industry so that its many social and economic benefits continue.”
A government small business survey showed that nearly 40% of SME’s trying to access finance experience difficulty, and this rises to 48% if they are trying to get a bank loan. Responsible Finance, formerly known as the Community Development Finance Association (CDFA), is concerned that the growth of ethical lending may be put at risk as support from the Regional Growth Fund comes to an end.
The Responsible Finance research will be launched tonight at an event at the House of Commons.
 Small Business Survey 2014: SME Employers (March 2015), Department for Business, Innovation & Skills.