· Be green or be gone: 45% cite lenders’ green credentials as ‘very important’ or ‘extremely important’ in their decision to borrow from them (despite rising cost of living).
· Reward my sustainability: 56% would consider a sustainability-linked loan (interest rate is influenced by the borrower’s energy efficiency), 25% wanted to know more.
· Flex my credit: 74% showed appetite for flexible credit that could fluctuate in repayment term and interest rate according to their changing circumstances (reflecting economic uncertainty).
Rising inflation, spikes in fuel prices and the growing cost of living crisis haven’t dampened UK borrowers’ climate conscience according to a new report on attitudes to unsecured lending from EQ Credit Services, (part of Equiniti), published today. Almost half (45%) of respondents classed lenders’ green credentials as either very or extremely important when deciding who to borrow from.
Of the 2000+ people surveyed, 56% would also be interested in a loan product that rewarded their efforts to live sustainably with a lower interest rate, should such a product become available.
“It’s amazing to see the British public prioritising sustainability in their finances despite all the pressures they’re feeling at the moment,” comments Will Ellis, Sales Director, EQ Credit Services. “Lenders now need to focus on evolving their green initiatives as quickly as they can; the market is insisting on it. Our data also reveals an appetite for credit products that are pegged to the borrower’s energy efficiency. This is a clear opportunity for an innovative lender to tap into this strong national sentiment.”
Growing wealth gap
The report goes on to reconfirm the widening wealth gap, exacerbated for some by loss of income over the pandemic. 49% confirmed they were more concerned about their finances since the pandemic began, with 18% saving less over the period. In contrast, 51% said they were now less concerned about their finances, with 30% banking more of their earnings during lockdowns.
The call for flexible credit
74% of survey respondents said they’d be interested in an ‘elastic’ line of credit, that could flex in repayment term and interest rate should their financial circumstances change. This reflects the uncertainty felt by so many Brits, with interest in such a product increasing dramatically this year, up from 39% in 2020.
“Today’s borrowers have a multiplicity of needs which are being rapidly shaped by global events,” continues Ellis. “In today’s marketplace, lenders must be prepared to offer customized and flexible loan products that can both support customers and help them achieve their financial goals.”
The report’s findings strongly indicate that consumers increasingly expect their lender to understand their circumstances, know precisely where they are in their life and exactly what they want.
“Technology has a crucial role to play here,” adds Ellis. “Data available through open banking is deepening lenders’ understanding of their customers, whilst intuitive tech enables them to adjust interest rates and restructure payment plans based on real-time risk profiles. To deliver the level of personalization needed and expected by today’s consumers, these profiles must now be deeper and more sensitively compiled than ever before.”
