Fintech for Good is launching a "robin-hood" social impact grant fund in 2020. This fund will support fintech projects that are aligned with our Theory of Change and strategic goals.
The grant fund is created out of voluntary charitable donations from our corporate members. 100% of donated funds are allocated towards these target projects, each of which is selected because it is aligned with Fintech For Good's strategic campaigns.
The fund is managed by Fintech for Good's experienced grant fund investment committee and overseen by the Board of Trustees.
The financially marginalised are routinely encouraged to make use of short-term lending services. Alternative sources of money are limited and for the financially vulnerable, these payday term loans are sometimes the only viable option. However with loans typically bearing interest of 1,500% APR. these debt traps quickly spiral out of control.
Even with a very small initial principal, debtors can quickly become saddled with insurmountable debt and a negative credit rating, placing alternative forms of credit even further out of reach. Yet on the institutional side, these now non-performing loans are repackaged and resold at heavily discounted rates of as low as two or three pence in the pound.
We believe that this difference in market price for this debt is a fundamental market failure and the price should be the price, regardless of whether the buyer is a wholesale purchaser or the private debtor themselves.
In order to close this arbitrage gap, we work with The Bank Job to buy payday lending debt from the institutional market and either sell it to the debtor at cost or we write it off completely, releasing the debtor to start to rebuild their credit rating. For every £10,000 raised in donations we write off around £600,000 in debt, changing the financial future of hundreds of people.
Fintech for Good will manage a fund that issues grants, loans and investments to community-share and for-more-than-profit fintech projects with social purpose. This fund supports projects worldwide which enable socio-economic change for financially disadvantaged communities and the low-carbon economy.
The fund is supported by Fintech for Good's generous corporate partners via their charitable contributions. In return, Fintech for good provides a powerful and cost-effective way to pool capital in order to manage the grant process efficiently.
We expect our grant funds process to remain relatively modest in 2020 but we are already inviting applications for grants between £1,000 and £10,000. We like to see projects that are finance related, which target sustainable positive impact on communities and have wide stakeholder involvement.
Art is not often thought of as a natural partner to finance, but art provides society with a universal language to communicate messages, ideas and emotions. Our artists in residence offer work on themes around the big questions in finance, the economy and society which enrich us all.
Fintech for Good supports artists working in finance through individual grants, residencies and the support of our network. We are keen to talk to artists from around the world who have an interest in finance.
Similarly, organisation members who are looking for artists who might participate in commercial projects can contact us to access our extensive network of artists.