Money does indeed matter, especially when you haven’t got it. Financial inclusion has been a government priority for some time now
But faced with statistics such as: nearly 70% of people who are considered to be financially excluded are on whole or part benefits; or, nearly 90% live in social housing; and, nearly 50% have no household insurance, the government have a huge task on their hands.
Five Lamps is trying to address this problem. Priding itself on the ethic of inclusion – ‘everyone is welcome’, and with the strap line, ‘Making People Matter’, Five Lamps provides a holistic approach to social and economic renewal.
Through their financial inclusion project, they are working with some of the region’s hardest to engage people and most excluded in our society and offer support for as long as it is needed. In June 2007, Five Lamps entered a new arena, that of the personal finance marketplace.
Through an initial grant from the Northern Rock Foundation, Five Lamps were able to employ someone for 2 years to provide personal loans to low income individuals who were unable to access mainstream financial services and consequently, relied on unaffordable credit and the ever-increasing array of predatory lenders.
Subsequently, Five Lamps secured a contract to deliver the Department of Work and Pensions’ Financial Inclusion Growth Fund. This fund was established as a response to a report undertaken by Experian on behalf of the Financial Inclusion Task Force. Five Lamps tendered to the Financial Inclusion Growth Fund and now delivers services across the North East, including in Stockton, Redcar, Scarborough, Newcastle and Northumberland.
In addition to providing direct services themselves, an integral part of the service includes signposting to other organisations who are deemed to be better placed to deal with an individual’s needs, including advice agencies, credit unions and housing providers. All of this extra work has led to extra employment. Five Lamps have taken on an additional 22 employees to ensure those people who need the service get it.
Five Lamps estimate by the end of this year they will have provided 4,700 loans. Important to their approach, is to build capacity and sustainability into the work they do. The Financial Inclusion Growth Fund contract will end in March 2011 but Five Lamps wants to make sure they continue to be in a strong position to offer support to those who need it and are therefore ensuring they build up a reserve to achieve this aim.
They already have built up a loan fund of over £2 million and as long as their service continues to grow, so too will the fund. Alongside building sustainability into its loan fund, Five Lamps have other big plans for the future. By 2011 they hope to be delivering a service to the whole of the North East region through the Great North Loan Fund (currently this is a working title). They have already undertaken a study to determine the feasibility of such a fund through a grant from the Third Sector Capacity Fund.
By 2012, they hope to be making in excess of 20,000 loans per year and their ultimate aim is to be making 30,000 loans per year and have a fund of between £15-20 million. They’d also like to extend their products to include Financial Awareness and Capability Training. They are also currently working on a Memorandum of Understanding with a world-class banking partner – whose identity is being kept under wraps for now!