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, the PwC evaluation is due by the end of 2026, and no successor funding is committed. 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 three million people using illegal lenders. Everything rests on the finite Dormant Assets Scheme, and the 2025 Financial Inclusion Strategy created no statutory affordable-credit funding stream.

WPI Economics estimates £6.4bn a year of economic value from closing the financial-inclusion gap. Where legal affordable credit is absent, demand migrates to loan sharks at effective APRs in the thousands, and the arrears, ill-health and state costs compound from there.

A permanent national no-interest-loan and community-lender growth facility with a statutory funding base: expanded dormant assets plus a matched contribution from banks, on the logic of the US Community Reinvestment Act, 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.

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