Addleshaw Goddard advises Fair4All Finance on innovative guarantee arrangement supporting access to affordable credit

Addleshaw Goddard has advised Fair4All Finance on a guarantee arrangement supporting a new partnership with Monzo, one of the UK’s leading digital banks, aimed at widening access to affordable credit for thousands of people who remain excluded from mainstream lending. 

Fair4All Finance is providing a partial lending guarantee of up to £7 million, enabling Monzo to share the risk of extending credit to customers with limited or low credit scores. The arrangement forms part of a broader effort to address financial exclusion across the UK by enabling greater access to responsible and affordable credit for consumers who may struggle to obtain finance through traditional lending channels.

More than 16 million adults in the UK face barriers to accessing mainstream credit, a figure that has increased significantly in recent years (LEK Report). The initiative seeks to demonstrate how innovative partnerships between mainstream financial institutions and social impact organisations can help bridge this gap and improve financial resilience. 

Zoe Connor, Partner at Addleshaw Goddard, said:

"Access to affordable credit remains one of the most important challenges facing the UK financial services sector. This initiative demonstrates how innovative structures and partnerships can help unlock responsible lending while supporting greater financial inclusion. We are pleased to have supported Fair4All Finance on a project that has the potential to make a meaningful difference to consumers who are underserved by traditional credit markets”.

Diana Kamil-Salmon, Associate Director of Commercial Propositions at Fair4All Finance, said:

“We are delighted to work with Monzo and to have been advised by Addleshaw Goddard on the structure of this partial lending guarantee that enables Monzo to serve more customers with the potential to widen access to credit for thousands of people. It’s a brilliant example of what private and public partnership can look like to amplify social impact”.

Fair4All Finance was established to improve access to fair, affordable and appropriate financial products and services for people in vulnerable financial circumstances. Through investment, innovation and partnerships, it works to increase financial inclusion and support the growth of affordable credit across the UK. (Fair4All Finance)

The Addleshaw Goddard team was led by Zoe Connor with support from Hannah Newton and Helen Stephen (Structured Finance & Securitisation) and Al Mangan and Thomas Withers (Competition).