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Fintech start-up to bring an end to financial exclusion

by LLB Reporter
8th Nov 19 10:52 am

Salad Money, founded by Debt Hacker campaigner and entrepreneur Alan Campbell, aims to smash the monopoly of credit reference agencies and deliver a totally new and fair approach to lending based on open banking and AI technology.

The company, which is the first open banking powered lender, is opening up affordable credit to 85% of applicants living in ‘credit deserts’ who were previously excluded from credit or paying extortionate APRs.

Last year over three million Britons were forced to turn to payday loan companies, paying a shocking total of £800m in interest at an average APR of 1250% on high-cost short-term loans. Furthermore, four in ten (16.8m) people in the UK have less than £100 in savings making them extremely vulnerable to “financial life shocks,” such as an unexpected car repair bill or a high utility bill.

Salad Money is hoping to make a change to these statistics with a revolutionary new method of credit decisioning which will disrupt the entire lending market by proving that loan affordability and risk can be assessed much more reliably and fairly judged by using open banking metrics.

Founder Alan Campbell said, “We’re all brainwashed into believing that we have to be ‘model credit citizens.’ But the system is broken. The credit reference agencies are responsible for perpetuating a flawed model that excludes millions from affordable credit and encourages irresponsible lending.”

Campbell added, “Credit scores unfairly penalise people on the basis of incomplete and inaccurate data, and metrics that have no bearing on their ability to repay a loan.”

Salad Money is initially focusing on the NHS ahead of a planned UK-wide rollout of affordable, low-cost loans for public sector workers. NHS employers are being assisted first and foremost as they have a strong duty of care to their staff.

Salad Money enables employers to enhance their staff’s financial wellbeing without the administrative burden or capital risk, and provide a supportive route for employees that removes much of the stigma for staff asking their employer for a loan. Having launched in May this year with an initial pilot with Mersey Care NHS Foundation Trust, Salad Money are expanding across the UK to build partnerships with Trusts located in ‘credit deserts’ – places where people struggle to access affordable credit.

This groundbreaking pilot has led to Salad Money being announced as one of six finalists in the Affordable Credit Challenge, run by Nesta Challenges in partnership with HM Treasury, which supports partnerships between UK community lenders and fintechs developing innovative technological solutions that will increase access to affordable, responsible credit.

The six finalists of the Affordable Credit Challenge have each been awarded £150,000 to develop their solutions further over the coming months, with the winners of the Challenge to be selected in Spring 2020 and receive an additional £200,000.

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