Monese the latest to debut credit building ‘savings-loan’

By Oliver Smith on Monday 24 January 2022

Digital Banking

Following Tide and Cashplus, UK fintechs are aiming to improve the creditworthiness of their customers.

Monese the latest to debut credit building ‘savings-loan’
Image source: Monese.

After acquiring income smoothing fintech Trezo just last month, Monese is now rolling out a Credit Builder service for all its existing customers.

Credit Builder acts like a reverse-loan, similar to that offered by Loqbox, with 12 monthly repayments that Monese locks away when you initiate the loan, meaning there’s no risk of the borrower defaulting.

At the end of the period, all the money is returned to the customer, leading some to dub it a ‘savings-loan’.

As Monese is reporting these repayments back to the credit bureaus, they have the effect of improving a customer’s credit score.

“Customer feedback has made it clear that access to credit is a persistent and real challenge in the UK,” said Monese VP of Credit, Garrett Cassidy.

“Many of our customers are also gig workers, side-hustlers, creatives and go-getters who struggle with accessing credit in the UK. We know that if anything happens to their bike, laptop or equipment, their livelihood is in danger.” 

“Credit is a critical part of them getting back on track and being able to earn and support themselves and their families.

After running a waiting list throughout 2021 for Credit Builder, Monese is now introducing it to selected accounts via an early access programme, with the aim of making it widely available in the coming months.

Monese is just the latest fintech to introduce a ‘credit building’ loan product in the last few months, both Tide and Cashplus have introduced similar features, albeit for their SME customers.

Customers with poor credit either struggle or are unable to access credit or apply for loans, with lending becoming a key revenue driver for these companies, it’s crucial that they offer a pathway for their credit poor customers to eventually borrow.

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