Affordable credit for negative-budget households has no permanent funding stream

The No Interest Loan Scheme pilot lent £10m across 13,175 loans to people declined elsewhere, with strong repayment; lending ceased in August 2025 and the PwC evaluation is due by end-2026, with no committed successor funding. Fair4All Finance, the CDFI sector and credit unions (now backed by a £30m dormant-assets Credit Union Transformation Fund) remain tiny relative to the vacuum left by the exit of regulated high-cost lenders, which Fair4All's research links directly to 3m people using illegal lenders. Everything rests on the finite Dormant Assets Scheme; there is no statutory affordable-credit funding stream despite the 2025 Financial Inclusion Strategy.

WPI Economics estimates £6.4bn/year of economic value from closing the financial-inclusion gap. When legal affordable credit is absent, demand doesn't disappear; it migrates to loan sharks at effective APRs in the thousands, compounding arrears, ill-health and state costs.

A permanent national NILS and CDFI/credit-union growth capital facility with a statutory funding base of expanded dormant assets plus a matched contribution from banks (mirroring the US Community Reinvestment Act logic), scaling from the evaluated 2026 pilot results.

// State-led: Instrument: statute expanding dormant assets and mandating matched bank contributions (CRA-style) for permanent NILS/CDFI facility.

When high-cost lenders exited, three million turned to loan sharks; the no-interest pilot repaid well but stopped, and its 2026 evaluation lands with no successor funding secured.