Opening Speech, Scotcash: North Glasgow Housing Association Branch Office
Steve Inch, Scotcash Chair
Scotcash was formed in 2007 by the Council, GHA and the Royal Bank of Scotland as part of the Financial Inclusion Strategy for Glasgow. Scotcash is in the unsecured personal lending business – providing an affordable alternative to high interest home credit companies (such as the Provident), pay day lenders (such as Wonga.com) and doorstep lenders. Its aim is to improve the lives of low income families by offering credit – where it is needed – at a fair price.
However it does much more than provide loans. For example it works with the Citizens Advice Bureau to provide debt and money advice, and with both RBS and the Glasgow Credit Union to help people open basic bank and savings accounts. And it is continually looking at ways of adding new services such as energy advice, low cost home insurance and cheaper white goods packages.
Scotcash is what is called a Community Interest Company. As such it has no shareholders and does not have to make a profit to distribute. Its financial objective is to generate only the surplus required to allow it to cover its operating costs and its gradual expansion. All of this – combined with its lean running costs means Scotcash can offer loans at a far cheaper cost than other lending sources.
And it is FAR cheaper. For example on a loan of £500 over 1 year – that’s a fairly average Scotcash loan – a Scotcash customer would repay £589. The same loan with the Provident – the cheapest alternative – would cost £910. That’s a difference of £321 over a year or around £6.17 per week. The difference becomes much greater if the comparison is with high interest pay day lenders. Given that a typical Scotcash customer has a gross weekly income of £247 per week we are making a big difference – and our contact with our customers suggests quite clearly that helping people escape the burden of persistent debt can be life changing.
In our first 4 years of business we have made nearly 4,500 loans totalling over £2.5 million. In total that’s saved our customers over £1.4 million in interest payments. We have helped our customers reschedule debt totalling nearly £5m. And we have opened nearly 1500 bank and savings accounts.
Scotcash now feels the time is right to expand – and the board are planning to grow the business by 12% per annum for the next 3 years. Most of this will be in Glasgow – with a focus on those GHA and Housing Association tenants who are most dependant on expensive home credit agencies. Scotcash cannot do this from its current city centre base where it is now working at full capacity – and is seeking partners to work with it who share its social and community ethos.
That’s why Scotcash is so delighted that North Glasgow HA has been first to step forward to host its first branch office. Robert Tamburrini, the Chief Executive of NGHA has been a Director of Scotcash since it was set up. He has been very generous with his time in supporting the development and growth of the business – and has been even more generous in providing and fitting out the space for the Scotcash office, in helping meet start up costs and in helping the branch office get up and running. The Scotcash Loans manager – Emma – has generated a huge amount of interest, has a full appointment diary and has already made many loans to (mainly) NGHA tenants.
And I’m sure this is only the start of a very positive long term relationship. So I’d like to formally thank Robert and his staff for all of their help, and to the Board of the Association for the confidence they are showing by having Scotcash as a partner.