Smarterbuys Store accelerates growth plans to take bite out of loan sharks

By Jun 29, 2015

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£1 million lent to low-income families to help them to furnish their homes affordably - Charity Bank backs growth plans of fair finance pilot scheme

The Smarterbuys Store, an organisation that helps provide affordable loans to people to buy household goods, announces it has lent £1 million to families and is embarking on an ambitious growth plan with the backing of ethical bank Charity Bank.

Derwentside Homes, the Prince Bishops Community Bank and the Northern Housing Consortium established the Smarterbuys Store as a pilot scheme in 2012 to promote the financial inclusion of social housing tenants by offering them an affordable weekly purchase scheme for household items.

The Smarterbuys Store is now ready to accelerate its roll-out plans by offering other social housing providers the opportunity to franchise the provision of this form of assistance to their tenants.

The scheme aims to help people living in social housing to obtain affordable finance to purchase furniture, white goods and electrical items. People can order through the website or in store and pay for items weekly over a two-year term. Part of their payment goes into a Prince Bishops Community Bank savings account to help tenants to save regular amounts.

Lesley Richardson, chief executive officer of Prince Bishops Community Bank, said: “We’ve taken an innovative approach to helping those in need to get access to fair finance and we’ve proved it works. After the initial success of our pilot phase, Charity Bank is backing the growth of our scheme so that we can replicate the model.

“Responding to demand from other housing associations looking to offer affordable finance to their tenants, we have developed a franchise model and are now ready to grow the venture. Social tenants can buy goods at a significant discount with affordable credit through the Smarterbuys Store and knowing that it’s backed by their housing provider gives them confidence.”

Charity Bank is providing partial match- funding of £50,000 through the scheme initially to three registered social landlords that have signed up to the franchise: Manchester Athena, a consortium of five housing associations; Sovereign, the largest housing association in the south and south west of England; and Incommunities, a Yorkshire and Humberside- based housing association. In turn each of these franchisees has invested £75,000 in a loan pot for their tenants to fund the purchases of products.

Patrick Crawford, chief executive officer of Charity Bank, says: “Increasing numbers of people are turning to door-step and high-interest lenders to obtain credit to buy the things that they need, often trapping themselves in a cycle of debt.

“We are backing the Smarterbuys Store to enable it to offer responsible finance options to more people looking for essential household items and to act as an alternative to high-interest lenders or loan sharks. We support its mission to provide a responsible credit route for low-income households and strengthen their financial resilience.”

So far the Smarterbuys Store has teamed up with 15 housing associations and 1 local authority to deliver the scheme with 4 others in the pipeline.

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About Smarterbuys Store

The Smarterbuys Store is a website that offers essential household items, including furniture, electrical items and white goods, at a significant discount from the recommended retail price and with access to responsible credit. It is a joint venture between Derwentside Homes, the Prince Bishops Community Bank and the Northern Housing Consortium to provide affordable finance to social housing tenants .

Established in 2012, the Smarterbuys Store aims to challenge the increase in doorstep lenders, loan sharks and stores offering high-interest loans. An affordability assessment and credit check is made into all applicants to ensure they can comfortably repay any loan agreed.

Products are also available for sale to the wider public.