Responsible Lending & Borrowing Workstream

This post sets out in more depth the work that will be undertaken on this workstream:

This work-stream will explore issues around responsible lending and borrowing, particularly around different approaches to providing affordable credit to low-income groups.  These approaches will be considered under the following classifications:

  • profit-making vs non-profit-making
  • self-sustainable vs subsidised;
  • individualised/personal vs mass/impersonal;
  • broader social impact (eg reducing poverty, improving financial inclusion and capability) vs   narrower economic purpose(providing a commercial lending service).

How these approaches combine and relate to ethical aims is complex.  For example, some profit-making services for the relatively poor provide a lending service tailored to the needs and financial literacy of particular customers (the personal approach) while others do not.  Personal approaches can increase the welfare of the customer but can also be used to discriminate and exploit clients.  They also tend to make credit available to relatively few financially excluded people, compared to impersonal approaches. On the other hand, services which aim at profit-making may not in fact be sustainable over the long-term without subsidy. The same can be true of services that aim at social impact without aiming at profit.

The research will consider how sustainability and client benefit can be pursued simultaneously.  It will also consider how different approaches help those just below the poverty line — as opposed to those well below.

As well as looking at the responsible lending, the project will also address the question of responsible borrowing.

Research methods

Desk Research

The project will begin with desk research involving:

  • Academic research and policy reports
  • Documents on key lenders, including annual reports, business plans, marketing information, market research

Workshop with key stakeholders

We will convene a workshop of key stakeholders at an early stage in the project to explore their views of responsible lending and borrowing and their views of how we might conduct the research

Empirical case studies

The main part of the research will involve case studies of different organisations lending to people on low incomes which represent different aspects of our four-dimensional classification.

As well as collecting key statistics and documents from each organisation, we will also gather qualitative data by:

  • Interviewing managers and employees at all levels within case study organisations to gauge their views on how the organisations work and what they achieve
  • Interviewing customers from each organisation to gauge their views on how the organisations work and what they achieve
  • Observing the operation of each organisation

International comparisons

Our focus is mainly on the UK but we are also keen to make international comparisons and learn lessons from other countries in relation to responsible lending and borrowing, particularly in relation to affordable credit for people on low incomes.


The project began in July 2012 and will run for three years until June 2015

FinCris Staff work-stream on responsible lending and borrowing

 Karen Rowlingson (Co-investigator)
Professor of Social Policy


Lindsey Appleyard
Research Fellow, CHASM


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