Ethical lender Plend is making a significant move in the finance industry with the launch of its first interest-free lending product. Designed to cater to low-income borrowers who are usually excluded from conventional finance options, the product, called ‘Social Credit,’ offers loans ranging from £500 to £2,000. Plend, which recently applied for B Corp status, is introducing this not-for-profit solution to provide financial assistance without any interest or fees.
Aiming for Social Impact
The primary objective of Social Credit is to support individuals who have been turned away by other lenders and face the risk of falling prey to loan sharks. Plend aims to assist approximately 4,500 people by the end of 2024 through this unique lending program. CEO Robert Pasco acknowledges that numerous individuals struggle to access affordable credit due to arbitrary credit scoring systems and the withdrawal of banks and traditional lenders from the near and sub-prime consumer lending market.
Social Mobility and Poverty Premium
Plend’s CEO believes that Social Credit will tackle these barriers and promote social mobility while addressing the poverty premium prevalent in the UK. By establishing Social Credit as a dedicated capability within Plend, the company aims to remedy the issue of limited access to affordable credit.
Raising Funds and Backers
In November last year, Plend secured £40 million in debt and equity funding. Notable backers include Monzo co-founders Gary Dolman and Paul Rippon. Moreover, Plend is currently awaiting B Corp certification, making it the first UK consumer lender to embrace the comprehensive environmental, social, and corporate governance standards set by the certification. The company is chaired by Luke Lang, co-founder of Crowdcube, who took on the role after stepping down as CMO of the crowdfunding platform in June 2021.