This is the National Housing Federation chain of moneylenders, MyHome Finance, I assume.
Funded by housing associations, a high-street bank, DWP and some major trusts, the pilot is aiming to open eleven shops in the West Midlands (they are trying to open near Brighthouse shops).
According to their own document:
"In contrast to most credit unions lending to this part of the market, MyHome Finance will be sustainable after initial start-up capital injection. The only income that it will generate to deliver a sustainable business is interest on loans. Accordingly, loans will be priced for risk: typical APRs will be above 50%, about £25 repaid on top of every £100 borrowed."
"They seem to be seriously knocking Credit Unions who they seem to see as 'competition' and they accuse them of being too cheap:
"This increases the urgency to develop social business models for affordable credit provision that are not dependent on significant ongoing Government subsidies. This will be difficult through credit unions which, capped at lending at 27% APR, cannot fully price for the increased risks of sub-prime lending . For this reason and others it is likely that the Community Development Finance Institution (CDFI) model will become increasingly important in providing alternatives to expensive commercial lenders like Provident and pay-day loan shops."
They're using Housing Associations to target 'customers and aiming to open, adding Hereford I'm told, "... in Wolverhampton, Walsall, Erdington, Acocks Green, Birmingham city centre, Dudley, West Bromwich, Telford, Tamworth, Worcester and Coventry. To the customer these will appear as a branded new player in the sub-prime loan market. Housing associations will act as the ‘route to market’ through tip-ins and promotional literature in mailshots and newsletters .... Appointments will be booked through a central telephony system and a lean staffing structure will keep costs low and productivity high.... housing associations will have regular proof of the return on their investment."
They're also pressing CABx to provide, with no funding, an advice presence in the shops, giving them more credibility and associating, in my opinion, CABx dangerously with a pretty dubious venture.
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