Can payday loan alternatives be affordable and viable?

This research, written by the Financial Inclusion Centre and funded by Friends Provident Foundation evaluates London Mutual Credit Unions’ payday loan pilot project. The long anticipated evaluation of London Mutual’s payday loan product The Barclays Community Finance Fund and Friends Provident Foundation funded London Mutual Credit Union to pilot a payday loan style product to assess whether, given the current restraints of the capped APR, offering such a product is viable and sustainable. There were over 6000 applications for the loans. The first loan cost approximately £6 more to administer and manage than the money made from the product, however when repeat loans and subsequent savings deposited in the credit union are included the product begins to break even.

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