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Affordable Credit Challenge

Cities & Societies
Prize amount: £2000000
31/07/2019 - 01/03/2020
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What was the Affordable Credit Challenge?

The challenge aimed increase people's access to affordable, responsible credit through innovative tech solutions. It also sought to bring community lenders and fintechs together in partnership. It was backed by HM Treasury and delivered by Challenge Works.

The aim was to increase access to responsible, affordable credit provided by community lenders through:

  • Creation of partnerships between community lenders and fintechs.
  • Supporting a range of different innovative solutions, demonstrating the role of technology in helping to achieve this goal.

Why did we run the Challenge?

Most of us rely on borrowing in one form or another but the inability to access fair and affordable credit is a challenge faced by millions of people across the UK. Community lenders don’t have the same resources and access to technology as high-cost credit providers – as a result they struggle to reach and serve all those who could benefit from their affordable loans. By bringing community lenders and fintech businesses together we sought to create a better marketplace – making affordable credit available to more of those who need it.

What happened?

Six partnerships were awarded development grants of between £125,000 and £150,000 to develop their solutions.

The three winning partnerships were awarded additional cash prizes of at least £200,000 in spring 2020.

8 million people in the UK...

are estimated to use credit to cover everyday expenses, which is why making this credit responsible and affordable is crucial

Over £1 billion worth of loans annually...

are offered by credit unions, CDFIs and other community lenders, serving almost 2 million people

22% of UK adults have less than £100 in savings...

Payday lenders, rent-to-own firms and home credit providers prey on people in need of credit

Impact of the Affordable Credit Challenge

  • 40 applications from community lender-fintech partnerships.
  • Six finalist partnerships developed innovative technological solutions to increase access to affordable credit.
  • The majority of finalists are still working in long-term partnerships.
  • Finalists developed their solutions faster and made their organisations more sustainable as a result of participating in the challenge.
  • Three out of six finalists stated they wouldn't have developed their product had it not been for the prize.
  • All the finalists report they improved their understanding of their users and their business skills as a result of participating in the prize.
  • Three out of six finalists secured additional funding and partnerships as a result.