Fair Finance's "credit-based social enterprise" provides loans to people unable to access mainstream credit from banks and building societies and whose only other option for credit are the exorbitant rates of loan sharks and predatory lenders, which frequently charge upwards of 200% APR.
Fair Finance is committed to responsible lending and enabling customers to manage their budgets and be more in control. A typical loan from Fair Finance would charge interest of 20% APR. Faisel Rahman, managing director of Fair Finance, says: "We took a risk and a punt on developing a new model of delivering financial services in areas that have suffered from market failure because mainstream banks will not go there. The only organisations to have got involved are the loan sharks and predatory lenders."
In the year 2005 to 2006, Fair Finance saw 1,000 people and made 350 loans worth £500,000, and has calculated it has saved its customers a further £500,000 in payments to predatory lenders. It has also provided debt management support to 200 residents, helping them to manage £1m of over-indebtedness.
Press Release 2008
The social enterprise Fair Finance, that aims to keep loan sharks from targeting poor Londoners, opened a new east London office in Dalston in January 2008.
Fair Finance Managing Director Faisel Rahman said the new office servicing the Hackney area meant people would be getting free financial advice.
If faced with a broken fridge or the need for new school uniforms instead of paying the loan sharks interest rates that can reach 400 per cent APR people can apply for a loan from Fair finance with a loan rate of 20 per cent.
‘This is a good day for the people of Hackney and a bad day for the rip off lenders in Hackney,' said Rahman.
‘We've seen lots of new lenders come to Hackney offering finance at ridiculous rates, lending to people knowing they can't repay, and we want to do something about it.
‘Mainstream banks are not an option for people with bad credit histories or those on benefits, and often those least able to afford it pay the most for what we take for granted,' said Rahman
Set up in 2005 Rahman said in the last 3 years Fair Finance has helped over 3000 people in East London and saved clients nearly £1m in interest.
Fair Finance offers loans for basic requirements and emergencies. It also help people refinance - they can pay off their debt to loan sharks and transfer the debt to Fair Finance.
First anniversary of Fair Finance
FAIR FINANCE CELEBRATES 1st ANNIVERSARY WITH PROMISE TO INVEST £1 MILLION TO TACKLE UNFAIR AND EXPENSIVE LENDING IN EAST LONDON
Fair Finance, an ethical and socially responsible lender, today celebrates a successful first year tackling unfair lenders who prey on vulnerable communities in East London.
At an event tonight at the Reuters Building in Canary Wharf Fair Finance unveils its plans to invest £1m to expand its services across Tower Hamlets, Hackney, Newham and Waltham Forest.
In its first year of business, Fair Finance has saved poor families over £1/2 million in rip-off interest payments, helped a further 1000 people suffering unfair lending practices, and made local loan sharks lives a misery.
Faisel Rahman, Managing Director of Fair Finance, said: “We’ve made a big impact on the lives of East Londoners in the last year and we hope to make an even bigger one in the coming years. People come to us because we provide honest loans at fair rates.
“Over the next few years we’ll be investing over £1million into East London and opening a new branch in Hackney; so if you live in Tower Hamlets, Hackney, Newham or Waltham Forest and you borrow from expensive lenders, door step lenders, home credit companies, or have bad credit history then give us a call and we may be able to help you”
Fair Finance exists to bring affordable loans and money advice within reach of poor people in the East End. Low-income families and minority communities are most at risk of exploitation. Clients typically have bad or no credit history and may not even have bank accounts. Fair Finance bases its assessments on ability to repay rather than credit checks.
Since its launch 18 months ago today, Fair Finance has made over 300 loans to individuals and small businesses in Hackney, Newham, Tower Hamlets and Waltham Forest.
Unscrupulous and unfair moneylenders lure people into serious debt by charging interest rates of up to 1069% APR. Many of these lenders are legal moneylenders and major FTSE companies.
Fair Finance loans have helped families make vital purchases like cookers; fridges and school uniforms – without getting into money trouble – AND rescheduled expensive debts, SAVING PEOPLE FROM SPIRALLING DEBT AND HUGE INTEREST CHARGES.
Whereas doorstep lenders average 572% annual interest (APR), Fair Finance loans average 20-21%. Borrowing £825 over 14 months from Fair Finance, a low-income family would repay a total of £937. At the average doorstep-lending rate of 572% they would repay over £4000. “Hundreds and thousands of unfair loans like these are made every day across Britain, people just don’t realise what they’re being charged” says Faisel Rahman.
With nearly 300 personal finance clients, Fair Finance has therefore saved poor people over £1/2 million in rip-off interest payments in the last year alone.
Fair Finance is expanding rapidly opened a new branch office in Hackney near the Dalston Junction in spring 2008.
“Our new branch office will put us in easy reach of thousands of potential clients in Hackney. If this office is successful then we’ll be opening one in Canning Town as well.“ says Jon Aldenton, Chair of Fair Finance: “We’re also very pleased to be working more closely with Banks like RBS/NatWest that will potentially allow us to open Bank Accounts in our offices, and with Housing Associations to help get closer to potential clients.”
To celebrate its 1st anniversary Fair Finance will host a reception at The Reuters Building in Canary Wharf where speakers will include Stephen Timms (MP for East Ham and Chief Economic Secretary at the Treasury) and Clive Briault (Managing Director at the FSA).
Fair Finance can be contacted to book an appointment with an advisor on 0207 780 1777
Fair Finance is a social enterprise working with community organisations, charities, government, banks and residents to tackle unfair lenders.
Fair Finance was launched on April 6th, 2005 as a fair alternative to the unfair lenders who profit from other peoples poverty. It is based in Stepney in the Ocean Estate, but covers Tower Hamlets, Hackney, Newham and now Waltham Forest. It will open a new office in Hackney in November 2006.