Street UK - Online lending platform launch

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Street UK Online Lending Platform Launch Tuesday 17 th May 2016

Transcript of Street UK - Online lending platform launch

Page 1: Street UK - Online lending platform launch

Street UK Online Lending Platform LaunchTuesday 17th May 2016

Page 2: Street UK - Online lending platform launch

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

Page 3: Street UK - Online lending platform launch

St Martins History• Launched in 2013• Based in London• Run as a charitable enterprise• Christian ethos• Provides social consulting to charities and social

enterprises

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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

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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

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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

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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

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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

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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%

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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.

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FCA Price CAP Impact• Several lenders exiting market• Reduction in APR – only to the CAP• Transparency in charges for customers• Are the changes enough?

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Online Lending Platform• Ethical lending platform• Access to affordable credit• Extended repayment periods• Financial education and advice

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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%

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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”

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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