08 Apr 2021

Financial Inclusion - The Global Issue

Financial exclusion is a major problem globally with billions of people unable to access standard financial services. Often driven by the lack of a credit history, for many, this is a difficult situation because if they’ve never had credit they can’t build a credit history. The consequence is that many turn to expensive sub-prime lenders and succumb to a spiral of debt. 

People without a good credit score could find themselves without access to basic things like a mobile phone contract or access to post-paid utilities or the bigger things in life like buying a house or taking out a loan to buy a car. What’s worse is two people with the same incomes and same credit (mortgage, loan, credit card etc) but with different credit scores will pay vastly different amounts of interest. We think this is unfair and excludes hard working people from getting the best possible deals. So what? Without opportunity life is harder and more expensive. Without capability life is more complicated and confusing. Without resilience life is more stressful. This limits the potential of individuals and hurts the economy by locking up people’s economic value. Like any unintended consequence from the way a system has been created, there is no reason to accept the status quo.  

It’s estimated that around 5.8 million adults in the UK are credit invisible. Nearly a third of Britons have been turned down for credit or not got the competitive rate they had hoped for because their credit scores aren't up to the mark. The proportion of those turned down or offered poorer rates jumps to 57% for 18-34 year olds. Of those, 65% have been turned down multiple times and a quarter have been rejected more than five times – equating to over one million young people. 

In the United States, 44 million people (21%) are credit invisible. In addition, around 120 million people (34%) have a fair or poor credit score. LOQBOX is on a mission to change the financial exclusion crisis by giving everyone across the US and the United Kingdom access to a free credit building solution.  

LOQBOX was started by Tom Eyre and Gregor Mowat. When Tom’s little sister was refused credit to buy a sofa, frustration with the inflexibility of the credit-scoring system drove him to start creating solutions to help people build their credit history to access fairly priced credit. Gregor has seen first-hand how many people are excluded from accessing fairly priced credit because they are young with little or no credit history, or because they have made past credit mistakes. Tom and Gregor co-founded LOQBOX after setting themselves a mission to end financial exclusion globally, finding solutions to this problem that work for both the lenders and these financially excluded groups. LOQBOX has already helped hundreds of thousands of people to save money and build their credit scores.   


Guest blog by Tom Eyre & Gregor Mowat Co-CEOs and Co-Founders of LOQBOX.

To find out more about LOQBOX, visit their Twitter and LinkedIn pages.

To read more from #OpenFinanceInclusion Campaign Week check out our landing page here.