street uk - online lending platform launch
TRANSCRIPT
Street UK Online Lending Platform LaunchTuesday 17th May 2016
Street UK History• Launched in 2000• Based in West Midlands• Run as a social enterprise• Provides affordable finance• Supports other social enterprises and financial
institutions with software and support services
St Martins History• Launched in 2013• Based in London• Run as a charitable enterprise• Christian ethos• Provides social consulting to charities and social
enterprises
Street UK Achievements• Helped over 31,000 customers• Provided over £15 million in affordable credit• Saved each customer over £242 versus
comparable Doorstep Lender• Built up a branch network across the West
Midlands
OWNER OCCUPIERS
2.8%Family/Friends
9.3%
Private Landlord25.6%
Social Housing60%
Street UK ImpactMale
27.8%Female72.2%
Single
74.3%
Couples
24.6%
Working
43.1%
Benefits
51.6%Retired3.4%
With Childre
n62%
15%
39%21%
15%
6%
3%Age Groups
18-2425-3435-4445-5455-6464+
Baby
Expen
ses
Birthd
ay
Car R
elated
Chris
tmas
Clear
Debts
Electr
ical G
oods
Holida
y
Home I
mprove
ments
Moving
Costs
Person
al Ex
penses
Schoo
l Unif
orms
Weddin
g Cost
s0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Loan Purpose
£15m
Loans advanced
Overall savings
£7.5m
High Cost Short Term Credit – the 2013 picture• In 2013 the Short Term High Cost Credit market
had;– 1.6 million customers– Who took out 10 million loans– With a total value of £2.5 billion– The average loan was £260– Each customer taking an average of 6 loans
High Cost Short Term Credit – Call to ActionIn 2013 many voices in civil society called for action on high cost creditThe Archbishop of Canterbury Justin Welby stated his ambition to make controversial high cost lenders redundant
Street UK & St Martins Partnership• Partnership formed in 2014• Provide platform for Street UK expansion• Offer affordable finance as alternative to High
Cost Short Term Credit• Launch online lending platform• Model a different approach to High Cost Short
Term lending
High Cost Short Term Credit –2013 cost of credit
Source (Moneysupermarket.com 2013)
LenderLoan Amou
nt
Total charge
for credit
Total repaya
bleTerm
of loan
Representative APR
Wonga £100 £14.79 £114.79 15 days 4,214%
Payday UK £100 £25 £125 28 days 1,737%
Quick Quid £100 £25 £125 28 days 1,734%
Payday Express £100 £25 £125 28
days 1,737%
Kwik Cash £100 £25 £125 28 days 1,737%
FCA Price CAP
0.8% Per Day
When loans are taken out or rolled over, the interest and fees charged must not exceed 0.8% per day of the amount borrowed.
TOTAL COST CAP
100%of amount borrowed
(applying to all interest, fees and charges)
Borrowers must never have to pay back more in fees and interest that 100% of
what they borrowed.
£15Default fees
If borrowers default, fees must not exceed £15. Firms can continue to charge interest after default, but not above the initial rate.
FCA Price CAP Impact• Several lenders exiting market• Reduction in APR – only to the CAP• Transparency in charges for customers• Are the changes enough?
Online Lending Platform• Ethical lending platform• Access to affordable credit• Extended repayment periods• Financial education and advice
How we compare Comparison
• Amount• Term• Cost of credit• Fees
• Representative APR
Wonga• £400• 3
Months• £145.20• Fees
Apply
• 1262%
Satsuma• £400• 3
Months• £172.39• No Fee
• 845%
streetUK• £400• 3
Months• £62.31• No Fee
• 201%
What our customers say
98% of our customers
rate our service as good or excellent.
“Brilliant quick and very affordable. Recommend...”
“Great really helpful applied for loan and received it by 4pm same day”
“It only took a few minutes to agree my loan”
“Really good customer service. Easy and quick and cheaper than Wonga”
“Really great service and lovely helpful staff! Would defo recommend”
Thank you• To all who have supported Street UK over the last
16 years
• To those who have supported Street UK and St Martin’s over the last 2 years in developing the Online Platform, especially– our customers and staff– our investors, including Esmee Fairbairn
Foundation, Barrow Cadbury Trust, Big Issue Invest and our angel syndicates and investors
– To all of you for joining us today to mark the launch