Not-for-profit lender FfY raises £7.5 million in investment

FfY partners with retailers including Whirlpool, Dunelm, Argos and Carpetright to enable its customers to access essential household items on credit

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Not-for-profit lender FfY raises £7.5 million in investment

UK not-for-profit Fair for You (FfY) has landed £7.5 million in investment to take on the traditional credit sector.

The investment, which includes £5 million in dormant assets funding from the UK government-backed Fair4All Finance, boosts the alternative credit provider’s available capital for its target customer base, who are unable to access mainstream credit for essential household items.

FfY partners with retailers including Whirlpool, Dunelm, Argos and Carpetright to enable its customers to access essential household items on credit.

Seven social investors joined forces to take out a perpetual bond that provides quasi capital of £7.5 million, which secures FfY’s balance sheet and allows it to leverage commercial funding to take on traditional credit providers.

Alongside Fair4All, the investment comes from Joseph Rowntree Foundation, Esmee Fairbairn, Tudor Trust, Barrow Cadbury Trust, Robertson Trust and Ignite, six of FfY’s existing social investors.

The perpetual bond provides £4.35 million upfront, rising to £7.5 million when fully drawn down from Fair4All.

FfY expects the investment to allow it to provide up to 250,000 loans per year in five years. It provided 25,000 loans in 2019.

Following the successful completion of the first phase of the perpetual bond, FfY has appointed Sarah Gardiner, formerly head of investor relations at Nationwide, to lead on commercial fundraising.

Gardiner, head of growth strategy at FfY, said: “I’m very excited to have joined Fair for You at a pivotal time. By lending responsibly and sustainably to tens of thousands of lower income households, Fair for You has demonstrated the huge opportunity to fill this much needed gap in the market. We are growing and diversifying our investor base to further boost our rapid growth and broaden the proposition.”

Howard Bell, chair of FfY, said: “There are around 15 million people in the UK struggling to access affordable credit who are just one unexpected bill or bit of bad luck away from a crisis. Lockdown has made it harder for families to live without basic items such as cookers and washing machines. The need for Fair for You to scale rapidly has never been clearer.”

“We are delighted to be the first genuine not for profit to use the dormant assets funding and ongoing support from social investors to leverage commercial funding and push out firms that take advantage of financially vulnerable customers.”