2017 Annual Report - placesforpeople.co.uk · from £750 and our rate range is 27.9% - 99.9%. ... correct. I would have no hesitation in recommending the financial services to friends

2017 Annual ReportPlaces for People Financial Services

Innovative finance products from a provider you can really trust

“ Providing responsible and affordable financial services that make a difference to people’s lives.”

Our Mission

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Foreword—PatEgan,GroupExecutiveDirectorAffordableHousing

As one of the largest providers of social and affordable housing in the UK, we are aware of the difficulties some of our customers face when trying to access credit from traditional lenders.

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02 Our mission03 Foreword04 Financial inclusion in the UK06 Our products and services

08 Social value10 Our partnerships10 Governance and awards11 Facts and figures

Contents

Places for People Group is committed to providing more than just homes, we aim to provide places where people want to live. Our products and services are socially and commercially driven, and as a not-for-dividend organisation, our profits are re-invested back into the business allowing us to sustain a wide range of activities that make a difference to people’s lives.

With this approach we established Places for People Financial Services in 2006, with the mission to support the financial needs of Places for People customers who have been excluded from traditional means of borrowing. Following the recession and due to continued pressures on living standards, we experienced an increasing number of individuals in the UK looking to access credit to make ends meet.

In response, we took the decision to provide our responsible and affordable financial products to all those who are not catered for by mainstream banks and building societies. This provided a real alternative to expensive doorstep lenders and illegal loan sharks.

Over the past 10 years, our unsecured loans have provided customers with more than £8.7 million of affordable lending through over 10,000 personal loan agreements. In addition, through our not-for-dividend approach, to help support our mission and Group values we have also been able to extend our offer to include secured loan administration for first time buyers, and a mortgage and protection brokerage service specialising in niche lending.

I am pleased to introduce this report, which demonstrates our performance over the last year. Our dedicated Financial Services team works with each and every individual through the application process. This report is a reflection of their continued effort and commitment.

I hope you find it of interest. Pat Egan

FinancialinclusionintheUK

In their 2016 industry review, Responsible Finance found that 6 million people, 10% of the population, frequently turned to alternative forms of finance to make ends meet.

The cause of this was primarily due to the effects of austerity, increases in the cost of living, and income not rising proportionally. Recent research from the Joseph Rowntree Foundation shows the number of households living on incomes below the level needed to afford an adequate standard of living has increased by a fifth (900,000) in three years. This trend often means people are approaching high cost payday lenders or illegal loan sharks.

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(1) Financial Inclusion Annual Monitoring Report 2017 – University of Birmingham.(2) Financial Inclusion Annual Monitoring Report 2017 – University of Birmingham(3) Financial Inclusion Annual Monitoring Report 2017 – University of Birmingham(4) Financial Inclusion Annual Monitoring Report 2017 – University of Birmingham(5) Responsible Finance Industry Report 2016 – published Feb 2017(6) Responsible Finance Industry Report 2016 – published Feb 2017

£156 million Was lent by responsible finance providers to 253,000

people and homeowners, helping consumers save £23million in repayments to high cost lenders (6)

4.7m Households living on incomes below the

level needed to afford an adequate standard

of living

45% Of those in the

bottom two deciles of the income distribution were finding it difficult to manage financially

or were just about getting by in 2014-15 (1)

3/10 Households were finding it difficult

to manage financially (2)

6mPeople frequently

turned to alternative forms of finance to make ends meet

1/3Of all 33-44years olds are just getting by (3)

1.52m Adults in 2015-16 don’t have a bank

account (4)

40% Of people in the UK have less than £500

in savings (5)

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Our range of products and services to support our customers and the wider public include:• Personal loan service to excluded borrowers • Secured loan administration for first time buyers • Mortgage and protection brokerage service specialising in niche lending

Our products and services

We provide a sustainable financial services offering that places the needs of our customers at its core.

Personal loansOur personal loans are a small sum, low cost solution for an unexpected expenditure such as car repairs or seasonal events such as buying school supplies.

Customers can apply for between £250 - £3,000 and set a repayment period of 6 months to 3 years. Our unsecured loan product is considerably more competitive than other lenders (see figure 1) who operate in this market.

Misconceptions can exist as to how responsible lenders, like Places for People Financial Services, can justify charging representatives interest rates of 99.9% APR. As a not-for- dividend company Places for People re-invest any profits back into the Group to help build more sustainable communities. The interest and charges applied to our loans product only cover the cost of providing the service. The rate of interest charged directly relates to the small sum, short-term nature of the loans we provide. Our loan product is designed around the ever changing needs of our customers.

Placesfor PeopleFinancialServices

Provident PersonalCredit*

Total amount of credit £500 £500

52 weekly payments £13.47 £18.00

Total charge for credit £200.44 £436.00

Total amount payable £700.44 £936.00

Representative APR 99.9% Fixed 299.3% Fixed

Annual interest rate 71.3% p.a.

Figure 1 Cost comparison with market leader*Information correct as of September 2017 — www.providentpersonalcredit.com

The rate of interest charged directly relates to the small sum, short-term nature of the loans we provide.

Furthermore, the higher the loan amount borrowed, the lower the APR applied to the loan value - rates start to reduce from £750 and our rate range is 27.9% - 99.9%. Our team is committed to being fully transparent when talking with customers and communicates information in a simple and clear manner.

Unlike other traditional lenders, charges for missed payments in the early stages of the loan are not applied. We support our customers and can reschedule payments to accommodate changes to their income.

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Equity loansOur financial services team also administer equity loans and other secured lending products on behalf of the group. These products were developed by the group to help first time buyers who could not raise the large deposits required after the credit crunch to purchase homes - the income earned from providing these services supports us in assisting the financially excluded.

1,200+Loans under

management

Mortgage brokerageOur mortgage brokerage service is free and impartial, offering whole-of-market access to help customers find an affordable mortgage deal that suits their personal circumstances. We even share the commission received from mortgage lenders with our customers, so not only is the service free, they actually get some money back when the mortgage deal is agreed.

59Protection and mortgage products provided

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SocialValue

The Places for People Group has a strong social purpose, and uses commercial methods, reinvesting any profits we make back into the business, to deliver social value.

Places for People Financial Services’ social purpose is to provide responsible and affordable financial services, which make a difference to people’s lives, to all individuals who are not catered for by mainstream banks and building societies. To do this, we provide our customers with affordable amounts of credit, and support them sympathetically if they experience difficulties.

For people on low incomes and without a savings buffer, access to affordable credit can not only help them avoid taking on unmanageable debt from high cost lenders, but also empowers them to take control of their financial health. In this way, responsible finance providers, like Places for People Financial Services, are an alternative to high cost credit, and help to build financial capability and resilience.

Miss Smith is a repeat customer, who says Places for People loans help her tremendously when she can’t afford to buy something up front.

She is always very happy with the application process and cannot fault the service.

Miss Smith commented that all staff are extremely friendly, and she feels like she is talking to a friend and can be herself when she calls.

She is happy with the loan offer, interest rate, length of the loan, and amazed by how quickly the funds are received. She would use Places for People Financial Services again and has already recommend the service to friends and family.

‘Miss Smith’ (Anonymous) — Repeat Loan Customer

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Mr Wood described Places for People Financial Services as an ‘absolutely superior service’.

Describing the application process as very simple and quick, Mr Wood was happy that Places for People didn’t offer too high a loan amount, so that the repayments do not stretch customers.

Mr Wood was happy with the interest rate, although felt it is a little high but understands the reason for the rate of interest given. Ultimately, Mr Wood felt Places for People have got the loan service right for affordable loans, and that the repayments are affordable and manageable helping give customers a financial lift when needed.

Mr Wood has already recommend our service to others and will use Places for People again.

David WoodFirst Time Loan Customer

Ms Dodd is a repeat loan customer, using her latest loan to fund the purchase of a desperately needed new sofa.

Without a Places for People Financial Services loan Ms Dodd said she wouldn’t have been able to buy her family gifts for Christmas.

Ms Dodd has said she was very happy with ‘excellent loan service’ which has really helped her, and she would recommend Places for People to friends and family.

Marla DoddRepeat Loan Customer

“ I found the service great for me. The repayment plan is within my budget. I found the staff very helpful and got my loan within 24 hours. My payment day comes out on the day it suits me. The interest is lower than anyone else. I would recommend anyone to go with Places for People”

What our other customers are saying

“ Really helped me out of a tight spot. They were really professional from start to finish. Easy to talk too and they help you every step of the way. Would definitely use them again”

“ Polite precise helpful and assurance at every stage of application — The staff were polite very helpful and no matter which member of staff I spoke they didn’t rush made sure at every stage I understood and agreed to the information was correct. I would have no hesitation in recommending the financial services to friends and family”

“ They gave me a loan as my fridge freezer broke down, been turned away by many loan companies but Places for People gave me a chance. Would definitely recommend to family and friends”

Our customers have rated us 4.9/5 stars based on Independent Customer Feedback.

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Ourpartnerships

We have developed relationships with like-minded organisations to provide a comprehensive financial service packages for our customers

Governance and Awards

Places for People Financial Services is authorised and regulated by the Financial Conduct Authority Firm reference number 663756

We have had a successful partnership with Clarion Housing Group since 2012, offering their customers access to our affordable loan service.

We are currently working with Affordable Lending Portal initiative on its online portal, through Asda Money, which matches prospective borrowers who need to find an affordable lender with responsible lenders in their postcode area.

This scheme will allow us to reach a much wider audience without a dramatic rise in marketing costs, enabling us to achieve the scale required to service the gap in the market that social lenders are still struggling to fill in a sustainable manner.

This regulation demonstrates our compliance with all required standards relating to the provision of credit, and ensures we follow set guidelines about how we manage our business and treat our customers.

In 2015, our innovative and responsible approach to lending within the housing sector was recognised with a Housing Excellence award, winning Best Financial Model for our affordable and accessible solution.

And in December 2016, Places for People Financial Services received a Judges Award for Social Lending at the F5 financial services awards.

Defaqto, a financial information business, which aims to help consumers make better and more informed decisions, have awarded our unsecured loan product a 4 star rating, which it defines as ‘a product with a good level of features and benefits’.

Places for People Financial Services is proud to be a Responsible Finance Provider.

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GenderFemale 65%Male 35%

Age18-24 26%25-40 53%41-60 18.5% 60+ 2.5%

TenureRenting 71%Parents/family 23.5%Homeowner 5.5%

TenureAgeGender

Customer demographics

Reasons for loans

3/ Christmas1/ Home Furnishings 2/ White Goods

5/ Consolidation of more expensive debt

4/ Car Repairs

£8.7m Value of loans to

date

10,500 Number of loans to date

£235 Average

saving per customer

Loan facts and figures 2016/1728,645 enquiries

£13.47 average weekly payment

1,940 loans funded

12 month average term

Ourfactsandfigures

[email protected] placesforpeople.co.uk/financial services