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One fifth of people in the UK feel excluded from the financial services market, and this figure rises to a third among ethnic minority groups.
According to a new financial inclusion survey by newly-launched consumer peer-to-peer lending platform Plend, this sense of exclusion can leave people unable to access credit or able to only use expensive borrowing facilities.
Furthermore, almost 40 per cent of Brits feel they are financially unprepared for an unexpected emergency, while 28 per cent said that the pandemic has made their financial position worse.
Plend’s chief executive and co-founder Rob Pasco said that the problems caused by financial exclusion are aggravated by limited comprehension of the UK’s credit scoring system in the UK.
Read more: Plend opens for borrower registrations
According to the financial inclusion survey – which was conducted alongside Nationwide, building society, fair finance campaigners Responsible Finance and debt charity StepChange – just 41 per cent of UK adults know their credit score, and 60 per cent do not know how their credit score is calculated.
“It’s outrageous that financial discrimination and exclusion is on the rise,” said Pasco.
“It has a detrimental effect across society as a whole and widens the poverty gap.
“Having a thin or invisible credit file is just one of the reasons many people are financially excluded from accessing affordable credit products and basic financial services – the lending industry has failed to address this problem at a time when the need has never been greater due to the cost of living crisis.”
Plend gained Financial Conduct Authority approval to launch earlier this year, and began vetting its first borrowers in May. It aims to carry out £14m of lending this year.
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