You may have read in the newspapers this week that BNP Paribas has signed a landmark financing deal with Fair Finance, a not-for-profit organisation that aims to bring affordable borrowing to many across London.
£1 million of financing is being provided to the East London-based organisation jointly by BNP Paribas and Société Générale, to fund small personal and business loans.
Fair Finance aims to combat ‘financial exclusion,’ which is a significant problem in London. Those on low incomes, the unemployed and single mothers can often find it very difficult to access normal banking arrangements and may have to revert to borrowing from fringe lenders that can charge very high rates of interest (often upwards of 400%!).
Fair Finance was set up to provide an acceptable but commercial alternative, inspired by the microfinance movement. Although it has access to government grants and individual donations, it needs to become associated with commercial banks and to demonstrate its ability to borrow on commercial terms. This was an opportunity for us to make a direct contribution to solving the financial and social problems in London’s most deprived boroughs, consistent with our commitment to CSR and our supporting microfinance globally.
This is the first microfinance deal that we have been involved with in the UK and we are proud to be associated with such an initiative.