Plend introduces interest-free ‘Social Credit’ for low-income borrowers
The not-for-profit initiative offers loans of between £500 and £2,000 for terms of up to 24 months
Ethical lender Plend is launching its first interest-free lending product aimed at low-income borrowers who are typically excluded from traditional finance.
Called ‘Social Credit’ the loans of between £500 and £2,000 are a not-for-profit product for Plend, which has applied for B Corp status, with no interest or fees.
Plend says it’s hoping to support 4,500 people by the end of 2024, with loans only available for customers who are referred to Plend after being rejected by other lenders and are at risk of being targeted by loan sharks.
“Large segments of the population are excluded from accessing affordable credit due to arbitrary credit scoring systems, alongside the retreat of banks and traditional lenders from the near and sub-prime consumer lending market,” Robert Pasco, CEO of Plend said.
“To tackle these barriers in accessing affordable credit, we have established Social Credit as a dedicated capability within Plend to remedy this problem, while promoting social mobility and tackling the poverty premium in the UK.”
Plend raised £40m in a debt and equity funding last November with backers including Monzo co-founders Gary Dolman and Paul Rippon.
The lender is also currently Pending B Corp status, making it the first UK consumer lender to adopt the environmental, social and corporate governance standards required by the certification.
The company is also chaired by Luke Lang, after the co-founder of Crowdcube stepped down as CMO of the crowdfunding giant in June 2021.