Social Impact Report 2017
MoneylineA loan company with a diﬀerence.A fair ﬁnance provider is simply a business that is prioritising your ﬁnancialneeds, health and wellbeing, over their proﬁt. That is the message I havebeen sharing about Moneyline and others as part of my mission to endhigh cost credit. A mission that Moneyline is part of.At least 13 million people from the lowest income households in the UKare ﬁnancially excluded by mainstream banks and lenders. Many of themhave irregular income, closely linked to a lack of job security and thereforepay a premium for access to credit. Changes in the economic environmentsuch as welfare reform and increases in the cost of living have createdfurther ﬁnancial pressures making it even harder to have any money fornon-everyday and unexpected expenses.Moneyline exists to serve these lowest income households by providingaﬀordable, low value short term loans and small sum savings accounts.They are founded in the belief that credit, provided responsibly and notcreating further hardship is a vital tool in helping people spread thecost of something they need and that access to aﬀordable ﬁnancialproducts that ﬁt with your life should not be a privilege.
I founded the End High Cost Credit Alliance because I believe peopleneed a fair, aﬀordable credit product. Lenders need a fair, aﬀordablecredit product. The Alliance exists to bring fairness for the lendersand fairness for the people they serve. Our partners, like Moneyline,represent organisations who have a role to play in making this possible.Collaboration, maximising our collective resources and focusing on whatworks will enable our movement to deliver change that is long term,measured and pragmatic.This report highlights the positive and substantial impact that Moneylinehas achieved for the customers they have seen in 2017 by continuingto put them at the heart of everything they do, delivering products andservices that ﬁt and ﬂex with the uncertainty of their customers lives.In the year ahead, the Alliance and I will continue to supportMoneyline and other providers of fair and responsibleﬁnance so that together, we realise the vision of endinghigh cost credit. Michael Sheen Founder of the End High Cost Credit Alliance
Delivering impact in the livesof low income householdsFor the last 15 years Moneyline has been a leader in developing alternativeways to provide ﬁnancial products to low income households.We started out in 2002 with a shop in a small former industrial townBlackburn, in North West England. Set up as a Not-For-Proﬁt with thebeneﬁt of the community at the heart of our ethos, we quickly discoveredthat the demand was signiﬁcant and began to expand into more towns inthe North West. We had a compelling mission to help as many people aswe could that the mainstream banks and lenders had left behind.Our ambitions for growth have remained a constant and as we move into2018, our branch based business now also covers the wider regions ofHumberside, the Midlands and South Wales. We have also launched aUK wide telephone loans service to expand our reach into many morecommunities moving forward.
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Delivering impact in the livesof low income householdssince 2002£76 million lent £35 million £9.5 million 142,000 loans Interest saved Savings depositsMoneyline is structured with the beneﬁt of the community, not theshareholder model, which legally locks our mission and ethos.We focus on eﬀective saving alongside the provision of credit and wherethe loan is not the best solution for our customer, we partner with StepChange (a national debt charity) to sign post for advice. Our partnership with Moneyline means that customers are aware that free, conﬁdential and impartial debt advice is available. We’ve trained their staﬀ to help them spot the danger signs of debt, and worked with them on their arrears letters. By working together we can ensure that customers get the help and support they need.
Investing in our peopleand communitiesOur people are not incentivised to lendto customers. As an accredited LivingWage employer we create fairly paidemployment in the communities weserve. Our salary ratio is 5:1 from thelowest to the highest paid employee.A sustainable social enterpriseWe are a commercially sustainable organisation where the total incomefrom operations covers the total cost of delivery without any materialsubsidy. We price our lending product fairly and realistically to achievethis outcome.
Understanding ourcustomers & theircredit needsMost of us need credit at some point inour life. However, for a proportion of thepopulation this can be quite diﬃcult to access for a range of reasons.Moneyline lends to some of the most ﬁnancially vulnerable householdsin the UK. We were established to address this issue. We only lend whenappropriate, to individuals who typically have a household income of£15,000 or less. In 2017 we made over 15,000 loans to 10,700 peoplewhose only alternatives would be high cost credit.Customer FirstOur Customer First approach delivers a digniﬁed, respectful andresponsible experience that doesn’t judge or patronise. We give backcontrol and peace of mind to our customers, including ﬂexibilitywhen things go wrong for them, by varying repayments and freezinginterest charges. This ultimately contributes to improving their healthand mental wellbeing.
Segmentation of lowincome householdsand how they use credit Average annual household income of lowest 20%£10k or less £11k - £15k £15k - £20k £25k - £30k Uses credit to spread non everyday but essential expenses Uses credit for non Home Credit / Catalogues / Rent to Own essential expenses / larger items or to manageused to a face to face or speaking in person and expected not to pass a conventional credit score other credit High loyalty / High retention Car Loans / Credit Cards / Store Cards. Expects on-line and a credit check Vulnerability to variation Vulnerability to over income / income shocks indebtedness
Knowing our customersWe know our customers well and they know us. Their feedback identiﬁes ourfriendly, personal service and fair credit oﬀers as the reason they stay with us forcredit in the future.Our in-depth understanding of diﬀerent aspects of our customers’ livesallows us to shape our products and customer experience. Our relationshipwith our customers goes beyond the transactional. By oﬀering a digniﬁed andnon-judgemental process and being clear with our decisions we build loyaltyand our customers trust us to be ﬂexible when things go wrong for them.Our customer statistics refer to calendar year 2017, there has been there nosigniﬁcant variance to 2016 (+/- 5%). Customer proﬁle 69%Male Vs Female 31% Vs 69% of customers who got a loan from us in 2017 were female
60% In 2017 Employment status 35% 6 in 10 of our customers are not employed, 4% with the majority reliant on beneﬁts as their main source of income. 1%Not Employed Regular Paid Employed Retired Self Employed 84% 16%£14,820 84%Annual household income Receive someIn 2017 Moneyline customers had a median form of beneﬁtannual household income (before housing costs)of £14,820. 30.0% 26.0% The majority of our customers (84%) receive some 14% 3% form of beneﬁt (which may or may not be their1.0% main source of income). The chart below shows of the 84% the main beneﬁt received tends to be employment related or linked with the customer having dependent children. 7% 6% 3% 3% 4% 1% 1% 0.5% 0.5%
Knowing our customersResidential status 47% aged 18 to 34Over half of our customers live in Almost half of our customers areLocal Authority or Social Rented aged 18 to 34 with the largestHousing with Housing Beneﬁt single proportion aged 25 to 34.typically covering at least some of This age group are likely to be inthe cost towards paying their rent. ‘Full Nest 1’ family lifestage.Under Welfare Reform, there havebeen some signiﬁcant changes to Families in the ‘Full Nest 1’Housing Beneﬁt which now comes classiﬁcation tend to have moreas a ‘Housing Costs Element’ children in the home than adults.of Universal Credit. This is a big The children in the house arechange for those customers as they generally younger than 6. Thewill now be responsible for paying parents rely primarily on credittheir landlord. for purchases and buy mainly household necessities with theIn 2017 surplus for luxuries. LA / Social 47% Rented aged 18 to 34 57%Housing
85% 17.3% Sing Sing HouResceeivheosolmdecomposition 35.8% With With Arofuonrmd o4f ibnen1e0ﬁot f our customers are 20179.1% single parents with dependent children. Sing Sing 1%Of those customers; With •ꢀ 6ꢀinꢀ10ꢀareꢀnotꢀemployedꢀandꢀareꢀ Withployed therefore reliant on beneﬁts as their 37.8% main source of household income to look after their families. Single (no dependents under 18) 36% Single (with dependents under 18) 38% •ꢀ 6ꢀinꢀ10ꢀliveꢀinꢀLocalꢀAuthorityꢀorꢀ With partner (no dependents under 18) 9% Social Rented Housing. With partner (with dependents under 18) 17%Household income 2017More than half of our customers have a household income(before housing costs) of £15k3o7.3r%less. Annual Income Banding 30%30% 24% 23.7%25%20% 17%15% 1145%.7%10% 9.6% 8.86%% 5% 4% £25,000 to £30,000 3% 2% 0% 4.0% Less than £5000 £5,000 to £10,000 £10,000 to £15,000 £15,000 to £20,000 £20,000 to £25,000 0.9%£30,000 to £35,000 More than £35,000 AGE 18 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75+
Customer income comparisonMoneyline customers had a median annual household income(before housing costs) of £14,820 which is 45.7% lower than the rest ofthe UK (£27,300)*This limited income reduces their ability to meet unexpected or emergencyexpenses, so when our customers are looking for a loan it matters that theyfeel there will be a quick decision if they go through the application process.£30,000 £27,300 Median annual household£25,000 income (£)£20,000£15,000 before housing £14,820£10,000£5,000£0 UK Overall Moneyline Customers *The UK median annual household income has been re-calculated to take into account diﬀerences in household sizes and composition. (FYE 2017) £27,300. Source: https://www.ons.gov.uk/
UK wide 23In 2017 we served customers in 169 of the NE320* Local Authority areas across the UK. 1050The launch of our new telephone channelhas enabled us to serve a wider range of NWcustomers than ever before. 6005We now serve customersstretching from Moray in Scotland MIDdown to Plymouth. 1059 3 6823 SE SW 55 Number 8 of loans *Number correct for 2017
Helping the customers whoneed it mostMoneyline has established branches across the North West, Humber,Midlands and South Wales. We are located in communities where a signiﬁcantproportion of the population are in the lowest 20% income groups.North WestThe map of the North West region features the number of customers servedin this area, overlaid with the overall Index of multiple deprivation (2015).Darker the area indicates higher levels of deprivation.Date: September 2015Source: Communities and Local Government (CLG)Total customers 3799served in 2017 in the North West
Cleveleys Thornton Clitheroe Keighley Poulton-Le-Fylde LANCASHIRE Barrowford Colne Bingley Longridge Trawden Blackpool Brierfield Lytham St Anne's Kirkham Fulwood Great Harwood Burnley 210 BRADFO Freckleton PRESTON BLACKBURN Accrington 578 Hebden Bridge Oswaldtwistle Todmorden Halifax Darwen Haslingden Bacup Tarleton Leyland Rawtenstall Sowerby Bridge Brighous Southport Chorley Ramsbottom Whitworth Ripponden Littleborough Adlington Rochdale Horwich Bury Heywood Milnrow Standish 310 9 Bolton Formby Ormskirk Skelmersdale WIGAN G R E A T E R M A N C H E S T E R Uppermill Crosby Farnworth Prestwich 69 Wallasey Maghull Atherton OLDHAM Kirkby Hindley 740 Rainford Tyldesley Pendlebury Mossley Birkenhead Billinge Leigh Ashton-Under-Lyne Worsle6y04 MANCHESTER WIRRAL Heswall 7 Haydock Golborne SALFORD Neston Bootle E R S St Helens Newton-Le-Willows Irlam Hyde Glossop M E Y S I D97E0 Prescot LIVERPOOL Partington Sale STOCKPORT Romiley Marple Hoylake WARRINGTON Cheadle New MillsWest Kirby Wythenshawe Lymm Altrincham Holywell Hale Widnes 387 Bramhall Runcorn Poynton Whaley Bridge Woodford Knutsford Wilmslow Chapel-En-Le-Frith Frodsham Bollington Ellesmere Port Northwich Macclesfield Numberof loans & branchlocations
Helping the customers whoneed it mostSouth WalesThe map of the South Wales region features the number of customersserved in this area, overlaid with the Welsh Index of multiple deprivation (2014).Darker the area indicates higher levels of deprivation.Date: December 2014Source: Welsh Index of Multiple Deprivation (WIMD) 2014, Welsh Government Total customers 4548 served in 2017 in Wales
A470 Brynamman A4067 Crickhowell A4077 Abergavenny 068A4 A4059 B L A E N A U BrynmawrAmmanford Ystradgynlais A4221 A4054 GWENT A4109 Ebbw Vale Blaenavon A40 Rhymney Tredegar MONM A46 Glyn-Neath 630 A 042Blaina RHONDDAarddulais Pontardawe Merthyr Tydfil 43 CYNON A4 65 T A F A4046 A4048 Clydach Aberdare MERTHYR 2 TYDFIL 9 A4233 Abertillery Pontypool UskA48 N E AT H A4059 PORT TA LBO T Mountain Ash Bargoed A472 Neath 41 7 M Treherbert24 A4067 Treorchy Treharris C A E A4 9 3 R P H I L LY GWENT 821 42 17 Rhondda A4058 Ferndale Pontllanfraith 454 Cwmbran A A483 Pontycymer Abercynon Ystrad Mynach TORFAEN SWANSEA Port Talbot Maesteg Tonypandy Porth Pontypridd Risca Caerleon M4 064 A40 657 704054 A4 M4 A A4241 A4063 Caerphilly 459 NEWPORT A48 B R 5I 8D6G E N D Llantrisant A4 (M) N E W P O R T Pencoed A469 0 A48 Bridgend 4 A4232 4 A473 Pontyclun A4119 A4 54 941 CARDIFF A4106 4222 A4119 Porthcawl A48 Cowbridge CARDIFF P VALE OF A4160 GLAMORGAN A422 Dinas Powys Penarth Clevedo Llantwit Major A4050 405 4 26 5 Barry Number of loans & branch locations
LoansMoneyline oﬀer loans of between £100 and £1,500 repaid between 13and 52 weeks. Our customers can access a loan via the telephone andhigh street branches.We understand that circumstances can change for our customers duringthe term of their loan, so we never charge late payment fees, or a fee if acustomer misses a loan repayment.In 201715,247 10,823 Loans Customers £9.3m £608Total gross loan Average grossvalue advanced loan value
How our rates ofinterest compareIn 2015 the FCA introduced a price cap on the cost of‘High Cost Short Term Credit’. Moneyline rates are signiﬁcantly belowthe cap. We price to cover the cost of delivery only.FCA Price cap on 0.2% per dayHigh Cost ShortTerm Credit (HCSTC)0.8% per dayMonthly rates of interest based on weekly repayments† (excluding any fees).*- Credit Union - - Moneyline - - Provident -* 3% per month 4.5% per month 7.3% per month* Maximum rate capped by legislation. † Fee 5% of loan value paid at loan completion.We have shown our monthly rates of interest as a comparison becausethe APR % does not represent the best measure for short term lendingof 12 months or less. All ﬁgures quoted are correct at time of going to print.
Savings £9.5mOur customers save alongsideborrowing, depositing over £9.5 millioninto small sum savings accounts.We call it “Round It Up” wherecustomers build a savings pot byrounding up their loan repayments.It’s simple, seamless and ﬂexible and hasled to a customer that most research saidcouldn’t save to doing so successfully.The key?Designing an easy process that ﬁts with our customer.In a survey conducted in January 2017, 50% of Moneyline customerswho participated told us they had a savings account in some form.Of that 50%, over 8 in 10 stated their savings account was withMoneyline. We are actively supporting our customers to become moreﬁnancially resilient!
33% 1,900 £460k Saving beyond loans New savings accounts Amount saved 33% of customers who had repaid In 2017, we opened In 2017 over £460ktheir loans continued to make regular 1,900 savings was deposited into accounts for payments into their our customers. our customers’ savings accounts in 2017. savings accounts.
Our customer storiesWe keep in touch with our customers and we like to hear how we’vebeen able to support them when they’ve needed a loan or wanted to save.Below are a few of our customer stories, visit our website:www.moneyline-uk.com to read more.I was considering applying with When I was younger I got into The Moneyshop but after a some trouble with debt and friend suggested I look around generally when you’ve been for a better deal I remembered like that people won’t give youMoneyline was on my local high a chance, but with Moneylinestreet. As it was my ﬁrst time they do give you that opportunity.applying with Moneyline I did They really do give you afeel nervous and slightly anxious chance here, you couldn’t go toabout applying but thought “no Barclays bank with my recordharm in trying”. I soon felt at ease but you are made to feel reallyafter the loan advisor carefully comfortable at Moneyline. It’s aexplained the process and ran familiar process and you knowthrough the application with me. the staﬀ will do their best forMy loan has helped me to buy you. You aren’t ever madethings for my home such as new to feel awkward.carpets, a fridge, a bed and morerecently to help cover the cost Pontypridd Branch Customerof expensive vet bills when ourfamily pet needed treatment.Blackburn Branch Customer
I became a Moneyline customer a Moneyline work with you to work number of years ago and have out the best loan for you. had more than 10 loans. More When I ﬁrst used Moneyline,recently I’ve used Moneyline to I wanted a bigger loan, whichenable me and my husband to go turned out to be more than Iaway on holiday and have days could aﬀord. The member of staﬀout to create lasting memories. talked through the reasons whyMy husband was terminally ill with they couldn’t oﬀer me a particularcancer so it really was precious amount and thought of whattime spent together. was best for me in being able toMy main source of income is state aﬀord to repay.pension, so we often wouldn’t I like the fact that they don’t justhave much money spare to give you what you want so theyspend on nice things we wanted can get more back in interest.to do. On top of that, due to our They think of what’s best for you.age, our options for accessing If you’re struggling or need tocredit were also limited. I strongly buy something in particularbelieve that if Moneyline didn’t I’d go to Moneyline for help.exist I wouldn’t have had thoseopportunities to really make the Stoke Branch Customermost of the time I had left withmy husband.Stoke Branch Customer
Transforming access toﬁnancial products for lowincome householdsThe economically challenging environment for our customer group willcontinue for some time to come. Alongside this, the regulator continuesto scrutinise the fair treatment of customers in the high cost credit market;this is important, but may have the unintended consequence of furtherdisplacement of the most vulnerable customers, as commercial lendersmove to supplying products to individuals further up the income scale.It is now more than ever that Moneyline must respond to this by deliveringon a continuous process of evolving appropriate products and services thatmeet the needs of the ﬁnancially excluded population.Our strategic plan for the next three years focuses on helping as manyof the low income households as we can by opening up new waysto access a Moneyline loan.
Our 4 platformsfor growth - Communities - - Partnerships - We will remain committed to We will ﬁnd partners for future growth being where the customer is and covering a wider network across policy,design our customer experience to regulation, community, technology,feel connected to how and where investors and service providers to link they live. to our product strategy. - Products - - Capital - We will use our customer insight We will ﬁnd investors that are aligned and voice to evolve our products with our mission, values and granular understanding of our customer. We will and services to respond to the work with investors to co-design the needs and uncertainty of their best capital structures to deliver scale. rapidly changing lives.Building a ﬁnancial institution that isnational, yet rooted in the communitiesthat it serves.
If you would like to know more about the Moneyline story please get in touch Moneyline The Globe St James Square Accrington BB5 0RE [email protected] www.moneyline-uk.com Registered Name : East Lancashire Moneyline (IPS) ltd trading as Moneyline. Registered in England and Wales – 29282RRegistered oﬃce: The Globe Centre, St James Square, Accrington, Lancashire. BB5 0RE Tel: 01254 290018 Authorised and Regulated by the FCA Reg no: 660597
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Social Impact Report 2017