The Centre for Social Justice, an independent think tank, has published a new report, ‘Future Finance’, which explores consumer debts and claims 8.8 million people are over-indebted.

The report’s key finding is that many low-income households often have to rely on banking services designed for people with larger or more regular income which can leave them worse off. It argues that the government should take the lead in developing Alternative Financial Institutions (AFIs) which could deliver products better suited to this customer base.

Recommendations include:

  • Introducing new forms of accreditation so investors can more easily identify AFIs.
  • A new body to assess the business models of AFIs and connect them with social and commercial investors, using funding from Big Society Capital, Corporate CSR programmes and charitable organisations, to provide a guarantee for investors.
  • The government establishing a social financial technology accelerator programme (SoFiTech) in partnership with the FCA to nurture young tech start-ups and provide seed funding as well as mentorship to help grow the business.

An accompanying press release was also issued to support the publication of the report.