- Description of the programme
- The study
- What are the outcomes?
- Key findings
- Points to consider
Description of the programme
Fair For You is a registered charity which makes loans to low-income customers with less than perfect credit scores, who need to access credit to buy household items. It does so through its lending subsidiary Fair For You Enterprise CIC (community interest company), and via its online store (UK online). It aims to offer household goods at high street prices and was designed, in particular, to challenge and disrupt the high-cost rent-to-own market.
The loan is unsecured (customers own the goods from receipt) and is paid for by commission received from suppliers of the goods and by loan interest charged to customers. It makes no charges to the customer for set-up, early or missed payment, delivery or the removal of replaced goods. Customers can choose to make their repayments weekly, fortnightly, four-weekly or monthly and can choose a term of between 12 weeks and one year.
The study
The scope of this study was low-income customers of Fair For You, which offers flexible, affordable loans to those who need to buy household items. The study was funded by the J.P. Morgan Chase Foundation, and its aim was to conduct a social impact assessment of Fair For You, particularly comparing it to buying the same products (or equivalent products) through rent-to-own companies such as BrightHouse.
The study comprised 44 in-depth telephone interviews and a survey of 523 Fair For You UK customers, interviews with staff and a document analysis which included credit reports. It is single-sample, cross-sectional in nature and the results include descriptive findings in relation to the customer base and self-reported financial and wider impacts for customers.
What are the outcomes?
Financial impacts measured in the study are:
- Coping with the day to day running of the home;
- Being able to budget and manage my money;
- Being able to save some money each week or month;
- Being able to pay rent or mortgage and other household bills.
Wider impacts measured in the study are:
- Feeling anxious, stressed or depressed;
- Being able to eat more healthily;
- Being able to cope with physical health problems or disabilities;
- Children’s health and wellbeing;
- Problems with family relationships.
Key findings
- 60% of customers were female lone parents and a half are entirely reliant on benefits. Many had used high-cost credit, including rent-to-own (45%), before and some continued to do so;
- In addition to the lower costs, customers valued flexible payment schedules highly and identified the ethical and supportive nature of its offering. 87% rated Fair For You as excellent and 8% very good;
- As a result of the Fair For You loan, self-reported ability to: - Cope with the day to day running of the home had improved ‘a lot’ for 46%; - Budget and manage my money had improved ‘a lot’ for 38%; - Save some money each week or month had improved ‘a lot’ for 38%; - Pay rent or mortgage and other household bills had improved ‘a lot’ for 28%.
- As a result of the loan, self-reported levels of: - Feeling anxious, stressed or depressed had improved ‘a lot’ for approximately one third; - Ability to eat more healthily had improved ‘a lot’ for approximately one quarter; - Ability to cope with physical health problems or disabilities had improved ‘a lot’ for approximately a quarter; - Children’s health and wellbeing had improved ‘a lot’ for approximately a quarter; - Problems with family relationships had improved ‘a lot’ for approximately one fifth.
- The report also: - Identifies that Fair For You’s ability to offer loans is hampered due to the misreporting of credit information by rent-to-own lenders, which limits Fair for You’s ability to conduct accurate assessments of creditworthiness; - Emphasises the importance of referrals to and partnerships with it by other organisations (e.g. social landlords) to extend the reach and scale of Fair for You.
Findings are based on data from 523 survey respondents.
Points to consider
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Methodological limitations:
- The study does not include pre- and post-delivery measurement of outcomes, or any quantitative or qualitative approach to understanding causality. This limits (the strength of) the conclusions that can be drawn in relation to the outcomes (impacts) of the programme;
- The study is a cross-sectional study based largely on self-reported data and retrospective comparisons by respondents. This limits (the strength of) the conclusions which are drawn in relation to the outcomes (impacts) of the programme;
- The sampling method, response rates or representativeness of the achieved sample coverage are not given in the report;
- Confidence intervals or other measures of error are not given. Precise estimates are not reported for all measures.
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Relevance: The study is highly relevant for the UK and elsewhere at a time when the need for credit remains high.
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Applicability: Elements of process evaluation in the study highlight mechanisms for success for the delivery of affordable credit, although many of these will be particular to unsecured loans for lumpy expenditure.
Full report
The social impact of Fair For You
