Download Graeme Oram Presentation[1]

Brokering New Partnerships To Deliver
Affordable Credit & Financial Inclusion –
Investing in Prevention to Improve Life
Chances
20 May 2016
Graeme Oram, Chief Executive
Introduction
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Jimmy – A Bit of a Case Study
Some Context
The Problem
New Models to Create A Step Change in Local Agendas
Jimmy – A Case Study (2007)
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Long-standing employability customer
Tooled up by every available course but no progress into work
Biggest barrier - £000s of doorstep and other high-cost credit
Debt had created an insurmountable array of issues
Local advice services weren’t helping
Five Lamps recognised a massive gap in the financial services marketplace …… and
our capacity to integrate key elements of the service
One of our first borrowers – still a customer
Still in the low pay, no pay cycle
Small savings
Comes to us regularly with issues
He can still see the joins in local provision – he doesn’t have great customer
experiences
He is still one step away from Brighthouse or Wonga or worse
Jimmy – A Case Study (2007)
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Thanks to Five Lamps’ engagement with Jimmy we are now a leading Responsible
Finance provider
We’ve made over 80000 loans totalling over £30m since 2008
We are a lender and not an advice service, and we don’t offer a savings product
We have full Financial Conduct Authority permissions and are fully regulated
We have invested heavily in our infrastructure and in securing capital for on-lending
We want to work in partnership with local authorities, housing providers, credit
unions and the advice sector
We are committed to adding real value but local partnerships typically aren’t
working – so in most cases we have to do our own thing
Some Context
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Over-Indebtedness ‘Indebted Lives - The Complexities of life in debt (Money Advice
Service 2013)
Report ranked all 406 local authorities in UK – Hull (number 1 with 43.1% of the
population over-indebted) and Richmond-on-Thames, 406th with 1.2%
In our region:
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South Tyneside (39.4%) 7th
Middlesbrough (36.3%) 14th
Gateshead (33.9%) 20th
County Durham (31.6%) 32nd
North Tyneside (27.8%) 62nd
Darlington (25.5%) 81st
Hartlepool (36.8%) 10th
Sunderland (35.9%) 17th
Newcastle (32.9%) 24th
Stockton-on-Tees (28.2%) 58th
Redcar & Cleveland (26.8%) 75th
Northumberland (24.4%) 97th
Since that report - advice services reduced, credit unions closing and housing
organisations reducing discretionary spend.
The Problem
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Who owns this issue?
Who is accountable for it?
Who provides the investment?
How do we get a shared understanding and shared values?
What is the vision that we can rally around?..... and which shakes off organisational
boundaries (The Challenge to Professionals)
What are the priorities?
In Short – The Solution is Strong Partnerships …. With A Clear Agenda for Change
and a Commitment to Action
It may be that creating strong partnerships to deliver affordable credit itself creates
a gateway to wider financial inclusion. Credit is not the customers only need
Affordable Credit
Affordable Credit
Budgeting
Income
Maximisation
Welfare
Advice
Savings
Bank
Accounts
Debt
Advice
Financial Exclusion
Unaffordable Credit
Unable to Access Mainstream Financial Services
Accessible/ Available; Reliable; Flexible; Affordable; Social Heart; Instant; Treats Customers
Fairly
Shared understanding
of market and market
needs
LA Lead?
Commissioner Lead?
Public Health?
The case for
investment….
then investing
Capitalise lenders –
Social Investment
Bonds
‘Win Win’
Partnerships
(maybe a brand)
Create
Infrastructure
Accountable Local
Leaders
Business-oriented
Partnerships
More than Financial
Inclusion
Partnerships
Research
Social Impact
Education
Building new local models to address Financial Exclusion
All we need is…
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Strong leadership and accountability at local level
A positive policy framework… maybe the Life Chances Strategy
A commitment to resourcing community lenders as the catalyst for wider service
change
Brokerage of new partnerships with new relationships, spanning public, private and
social sectors
Greater and shared understanding of the market place with shared data sets and
widespread publication of data
It must be everyone’s agenda