But this issue has led to loan sharks taking advantage of these people’s financial situations, and it is time for the mainstream financial sector to address the credit vacuum, urges Fair4All Finance, a financial inclusion organisation.
It says that UK banks should consider emulating the success of ‘small dollar loan’ products in the US, which delivers sub-$1,000 loans to lower-income households, in its latest report, and explains that while the UK consumer credit market has grown by more than 50 per cent in the past year, the three forms of credit most commonly available to lower-income customers pre-pandemic now account for just 0.3 per cent of lending, down from four per cent in 2013.
