more than £ 410 per month each in benefits they were due .”
Salad Money – which specialises in affordable credit for healthcare workers and public sector employees with impaired , poor , or thin credit files – addresses financial exclusion by tapping into open banking . It also replaces traditional credit scores , the bane of many-a-loan-applicant , with its own proprietary credit decisioning software for affordability assessments .
“ Open Banking data enables our social enterprise to categorise and analyse an average of 1,600 individual transactions spanning the previous 12 months for every applicant ,” Rooney says . “ We use this , and AI , not only to make an approval decision but to generate unique insights into applicants ’ financial health , because we want to use the power of this data to drive change ."
Despite the best intentions , there is still a harsh reality to confront . Lenders like Salad Money can ' t accept all applicants , as that would be irresponsible . But they can have a tangible impact on the availability of credit to some underserved populations . This comes at a cost ; Salad Money ' s interest rate is 79.5 % APR , which Rooney readily accepts sounds “ horrific ” to most consumers . That , however , is simply the cost of doing business .
“ The reason why we have to lend at that rate is because of the losses that we see , the cost of funds that we have , and then the scaling of the business . Our lifetime loss
124 June 2023