Employee loan scheme launches to combat payday lenders

FAIRQUID, a new employee benefit loan scheme (EBL) that acts as an alternative to high-interest payday lenders, has unveiled ambitious national expansion plans.

Following a full trial of the EBL scheme in East Lancashire, FairQuid has  targeted Merseyside for the first stage of its roll-out programme.

It has teamed up with the Central Liverpool Credit Union to offer businesses and organisations the opportunity to give their workers access to low-cost borrowing and improved money management practices.

More tie-ups with community credit unions across the UK are in the pipeline as FairQuid looks to engage with businesses to foster employee financial health at no cost to the employer.

Companies can also proactively join FairQuid for free and will be connected with their local credit union.

It gives employees an alternative way to borrow money, switch high interest loans and cut debt.

Initially launched and trialled at 800-strong Lancashire-headquartered manufacturing company WEC Group, the scheme aims to improve employee engagement and retention.

Challenged with high staff turnover, WEC Group commercial director Wayne Wild was looking for an employee benefit that would attract and retain talent.

He was convinced credit union membership could be a huge benefit for the group’s workforce, so he worked with the Jubilee Tower Credit Union in WEC’s home town of Darwen and became co-founder of FairQuid.

Within 12 months, FairQuid achieved its goal of improving staff retention well above expectations. More than 130 workers took advantage of the scheme in the weeks following its launch and over £140,000 of high interest debts have been refinanced through the not-for-profit credit union.

Wild said: “It’s a win-win-win. The employer wins by saving on retention and recruitment, and their workforce wins with access to low-cost borrowing and an improved sense of money management.

“We have no liability for the loans which makes it a great staff benefit for WEC Group at absolutely no cost to us.”

He added: “If people are unhappy they bring that into work. If you just feel you are working to pay off credit card debts you are not motivated. As well as helping staff retention the benefit for us is motivating our workforce.”

All EBL loans are provided by FairQuid’s local credit union partners and repayments are made through payroll deductions. Workers apply for a short-term loan from their local credit union through an online platform, built and managed by FairQuid.

Criteria is based around their salary, service level and employee record. The scheme lets staff use their length of service as a risk mitigating factor for the credit union instead of just their credit scores as used by high street lenders.

Repayments are automatically deducted from the employee’s wage within a set period of a maximum of 24 months and that means that no payments can be missed. There is also a mandatory savings component to the scheme. There is an administration fee of 10% a year.

Vishal Jain, chief executive of FairQuid, said: “We are not lenders. We provide a simple technology platform that an organisation’s staff can use to leverage their hard work at the time of financial need and reduce their cost of borrowing. We believe FairQuid is about making financial freedom available to all.

“We’ve created a framework for borrowing in a plain, simple and easy way to understand. The platform allows you to apply for an EBL simply and quickly – and the decision process is both fair and impartial.”