Opening up access to affordable credit

NestEgg’s new platform is opening up access to affordable credit, helping responsible lenders grow their loan books.

Affordable credit providers could grow so much more quickly. Credit unions and CDFIs just need to make themselves easier to find and apply to.

Growth potential

For the risk profile of borrowers being accepted by community lenders, the interest rates are very low, even for ‘near-prime’ applicants (those with a TransUnion credit score between 604 and 627). According to the Bank of England, consumer borrowing in November was at a six month high and is up 7% compared to 2021.

In the USA, unsecured borrowing from credit unions represents 11.5% of all unsecured loans across the whole economy. This compares to just 1.6% in the UK. In fact, unsecured lending is $1 in every $5 lent in the USA (where car finance and mortgages play a big part).

The population of the UK is 13 times that of Ireland. However, Irish Credit Unions have loan books 3x the size of their UK counterparts.

So, if rates are low, the demand is there and credit unions in other countries are bigger players, what’s going wrong?

Credit unions are often quoted as being the UK’s best kept secret. And the sector has come a long way in digitising services. But competitors remain ahead. As a result, they’re picking up business which would be better served by more affordable credit providers.

For example, hard credit checks have a negative impact on an applicant’s credit score. Therefore, almost without exception, lenders provide a pre-qualification, a soft check for any new customer. Hardly any credit union in the UK does that.

Despite this, credit union loan books are up by 15% over the last year. Momentum is building slowly. NestEgg’s platform will accelerate this.

A new platform for growth

NestEgg’s new platform is opening up access to affordable credit, making it easier for individuals to access affordable credit.

We’ll do this by providing one place for people to check whether they are eligible to join as well as qualify for loans from responsible lenders across the UK.

The platform filters eligibility for joining and for loan products and provides soft credit checks. As a result, potential borrowers can see if they meet a lender’s criteria to be accepted for a loan. If declined, NestEgg provides bespoke tips and advice to help the applicant get accepted next time.

To boost take-up, NestEgg will receive referrals from dozens of external organisations, like housing associations, banks, building societies and others interested in promoting financial inclusion.

Responsible lenders can join the platform from just £97 per month.

We’re rolling out membership from 10 March, contact us below if you’d like to find out more.

About Adrian Davies

Adrian is a co-founder at NestEgg. He is an alternative finance and credit union expert with extensive experience of start-ups, business development, IT, Target Operating Models and regulatory compliance. Adrian has 20 years’ experience in the responsible lending sector, supporting credit unions with innovative ideas so they can grow and meet service user needs.