Experian launches loans from credit unions and other non-profits

Manchester Credit Union, Scotwest and Scotcash are among the first to sign up to the scheme, designed to give people an alternative to payday lenders

Consumer credit company Experian has added three UK credit unions to its comparison services in a bid to widen access to affordable and ethical credit.

The move, which also includes community development finance institutions (CDFIs), comes after the company found that around 25% of people using its loan comparison services are not currently eligible for mainstream lenders – leaving them vulnerable to high-cost payday lenders.

This is the first time they have been able to find out if they are eligible to access not-for-profit lenders through a major money comparison provider.

Providers signed up to the initiative include three credit unions: Manchester Credit Union, Scotwest and Scotcash. Experian, says it is in discussions to bring more lenders on board soon, worked with community finance platform Incuto to integrate the lenders.

Managing director of consumer services Clive Lawson said: “The financial impact of coronavirus is a worry for many of us and Experian is committed to supporting financial inclusion, especially during these challenging times. That’s why we are giving our customers another option if they are ineligible for credit offers from traditional providers.

“When a customer is unable to access mainstream credit from lenders, some feel as though they have no other option but to pursue other means such as payday loans or even illegal loan sharks. These products often have very high interest rates and can be structured differently from mainstream offers, which can make it more difficult to calculate the cost of credit and increase the chances of customers spiralling into debt. This innovation with Incuto to offer our customers credit options from not-for-profit community lenders provides a much-needed alternative.”

Incuto CEO Andrew Rabbitt said: “Incuto’s strategy has consistently focused on how our technology and partnerships enable credit unions and community banks to reach a wider audience.

“As our work with Experian shows, we will continue to build the channels needed to support this mission, part of which must ensure that ethical lenders are equally represented within loan comparisons. Now more than ever, it’s vital that credit unions have the technology to provide a seamless, digital experience to their members, and connect multiple lenders to aggregation sites, in a quicker and more cost-effective way.”