There is a real credit crisis happening every day but you have to be among the poorest in society to know about it. About 20% of the population end up facing a “poverty premium”, paying overdraft fees and high payday loans which they just cannot afford. Some end up having to use unregulated payday lenders.
One of the issues I have always been passionate about is finding ideas which could improve access to finance for those who are struggling. One such concept is “Back Banking”. I explained this in detail recently in an article for CAPX (see below).
The idea is a simple one – Basic bank accounts designed to serve people with bad credit scores and low incomes. Not only would they not allow overdrafts, there would be help and support with cash-flow management and it could be linked with Universal Credit Income too. This is something I have been discussing with the CSJ. The Centre for Social Justice (CSJ) continues to look for new and innovative ideas which can help those in poverty, where cash flow and unexpected costs remain a core problem.
I was also delighted to be one of the finalists for the IEA Richard Koch Breakthrough Essay competition recently. My entry was on a similar theme of access to finance, where I argued the case for microloans, or as I call it ‘Friendly Lending’. You can read more by clicking here.
To read my article about Back Banking for CAPX, click here.