2m fintech challenge launched to fight payday lenders

Industry News | 31/07/19

A £2m fund has been launched to encourage fintechs and community lenders to develop new ways to make credit more affordable. The prize, called the Affordable Credit Challenge, backed by the Treasury and UK charity Nesta, aims to combat the prevalence of high-cost payday and guarantor loan firms such as Amigo Loans or GetMyLoans.
The fund said: “While high-cost credit has a role to play in the market, too many people have been turning to these lenders – such as payday or guarantor loans – when it has not been appropriate for their own personal situation.” Consumers took out 5.4 million high-cost short-term loans in the year to the end of last June and paid £800m in interest and charges on them, according to City regulator the Financial Conduct Authority (FCA).