10-15% of the adult population without access to bank accounts 7-10 million with limited access to financial services 12 million people use sub prime market in the UK Sub prime market estimated value of £16 billion/year 3-5m using doorstep lenders 1m+ using pay day lenders According to the FSA, Government and Financial Inclusion Taskforce

Lack of personal lending to disadvantaged groups People face difficulty in raising finance to start or develop micro businesses People and businesses living in underprivileged areas suffer more the exclusion Debt problems affect a lot of poor people causing a spiral effect on their lives The lack of financial literature programmes create a real barrier limiting ability in managing personal finance Effects of financial exclusion in London

ServiceCost to client Money and Debt Advice Free Access to bank accounts Free Microcredit Business Loans 19-12% Personal Loans 35-28% + 5%admin Our Business

2005/ /9 Total number of clients seen and supported5000 Personal Loans Made (1200) £1,100,000 Microcredit Loans Made (130)£500,000 Bad Debt Rate7% Debt Advice Given 1500 Overindebtedness managed£12m Bank Accounts opened120 Savings for clients £450,000 Statistics

FINANCIAL CRISIS New categories of financially excluded Households Working class / self employed people Small businesses In UK 143 properties have been repossessed per day in 2008; they will become 205 a day in 2009 More people is borrowing from Payday Lenders charging up to 1600% The lack of access to finance has generated cash flow crisis to many small businesses

Challenges of the new economic climate New categories of financially excluded New products/services needs New delivery methods Households Quick and professional advice on remortgaging and debt problems -Telephone advice -Preventative financial capability programmes Working class / self employed people Consolidate high interest loans -Telephone interviews (for repeated customers) -Stricter connection with debt advice Small businesses Bigger and cash oriented loans for new category of financially excluded businesses -Referral partnerships with BSP -Strong attention on repayment affordability

Products/services adaptation More attention to exploited people Consolidation of unfair and usurious loans All 32 London Boroughs Same services as before Telephone advice services Financially themed workshops Assistance with applications to charitable funds/grants Loans up to £10,000 (£20,000 after 1 st year) Strengthen relationships with business advisors Focus assessment on current financial circumstances Step disbursement loans All 32 London Boroughs

Lessons learnt FF as Social enterprise look for solution in difficult times Innovated new products and services Consulted with stakeholders and clients to understand changing needs Tightened existing systems and made more efficient Couldn’t have done this change so quickly if primarily govt supported

Riccardo Aguglia Microcredit Manager 47 Ben Jonson Road, Stepney, London E1 4SA 18 Ashwin Street, Dalston, E8 3DL T: F: E: