Over three million people have borrowed from unauthorised lenders - Commentary from the CEO of My Community Finance
In response to this report released today from Fair4All Finance: https://fair4allfinance.org.uk/as-one-door-closes-illegal-money-lending/ that finds 3 million Brits have been forced to use loan sharks in the last three years, as high street lenders turn those with unfavourable credit scores away amidst the cost of living crisis...
Founder and CEO of My Community Finance, Tobias Gruber, said: "In today's rapidly evolving financial landscape, it's crucial to understand the risks associated with engaging with loan sharks. They may seem like a quick-fix solution if you're unable to borrow money elsewhere, but they often lead individuals down a treacherous path of financial ruin.
"Loan sharks exploit vulnerable individuals who urgently need financial assistance. With exorbitant interest rates and exploitative terms, they ensnare borrowers in a cycle of debt that becomes increasingly difficult to escape.
"Credit unions are one option to help subprime borrowers access the credit they need, but many people need to be made aware of their existence. Compared to the big banks, credit unions don't have deep pockets for advertising because they are not for profit, making it much more difficult for them to market themselves to those who could benefit from their services".
Among individuals aged 18 to 75 surveyed by Ipsos, 7% reported that either they or a member of their household had sought loans from unlicensed or unauthorised informal money lenders, commonly referred to as loan sharks, who impose interest charges.
Not-for-profit organisation Fair4All Finance's research has further revealed a notable shift in the operations of illegal money lenders, with a focus on a higher-income clientele. These lenders are now directing their attention toward lower-income employees, with a median customer income ranging from £20,000 to £24,999.
About Tobias Gruber
Tobias Gruber is the founder and CEO of My Community Finance. For the past 30 years, he's been a prominent leader in investment banking and asset management for some of the sector's most renowned banks, including Credit Suisse, SwissBank, JP Morgan and Morgan Stanley.
Fast forward to 2018, Tobias launched My Community Finance to provide a platform for the financially excluded, helping people to get back on their feet with ethical and socially responsible lending. Within 36 months, My Community Finance has become accountable for 25% of borrowing within the credit union sector.
Tobias has experienced first-hand how certain areas of the finance world are ripe for change and is a passionate advocate for using fintech to help people and solve society's economic problems.
About My Community Finance
My Community Finance is on a mission to transform how its customers manage their money by giving them access to ethical alternatives through two of the U.K.'s biggest credit unions: My Community Bank and Castle Community Bank.
Credit unions give a lifeline to customers who struggle to access mainstream credit by introducing them to financial communities that don't prioritise profits and whose unique regulatory structure means they can offer fairer rates.
Based in London and launched in 2018, My Community Finance is fully authorised and regulated by the Financial Conduct Authority and is a trading name of Amplifi Capital (U.K.) Limited, which has offered ethical and responsible financial products to near-prime consumers since 2015.
