What are the 5 new priorities for choosing financial products? How is ‘Fair Finance’ bringing private banking to people who are financially excluded? In this video hear Fair Finance Founder and MD Faisel Rahman answer these questions.
Faisel Rahman has a background in international development, including Grameen Bank and the World Bank, where he focused on developing the microfinance sector and expanding it around micro enterprise. In 2005 he founded Fair Finance, and is currently its Managing Director. Fair Finance is a social business that aims to reduce financial exclusion and exploitation amongst poor and low income communities in the UK.
In this video he explains the five traditional priorities in choosing financial products, how those have changed, and how Fair Finance are focusing on these new priorities.
The Five Traditional Priorities in Choosing Financial Products
Faisel talks about the traditional priorities people are expected to have when choosing financial products. They are:
Faisel’s New ‘Fair Finance’ Priorities
For the last few years, Faisel has run his own surveys on what is important to users when choosing a financial institution. He says the ‘traditional’ priorities have changed, and the new priorities his survey respondents answer are surprisingly consistent each year. They are:
Accessibility: can I access the product, the money, the institution. Can people access a bank where the local branch has closed, where there is no local ATM?
Flexibility: Where lives are chaotic, incomes are non-mainstream, and things change, can the financial institution be flexible enough to respond to the user’s needs?
Honesty & Simplicity: Faisel argues that even ‘Payday Loans’ are an example of the trend for honesty and simplicity. Rather than knowing “X% APR”, users know that their payday loan means they must pay back £30 per £100 once a month. Other loans are £50 a week, or £100 a week. People appreciate the simplicity of these, even where the cost is high.
Respect: To be treated by respect with the person who offers you the financial services, and the people you deal with when accessing that finance. No “why do you want this money?” judgements, rather a basic trust that you are asking for the money and – as long as you will repay it – that is fine.
Relationship: Many local lenders are ‘community leaders’, who feel they are delivering a service where otherwise people would go to loan sharks. People are happier with their relationships with these people than they are a
Faisel points out the fact that these 5 priorities are very similar to those the very rich get through private banks. The difference being that the rich can afford to pay for this service, and right now the very poor cannot, which is partially what keeps them poor.
Faisel talks about Microfinance in Bangladesh, and that we have almost forgotten about relationship banking in the UK. Faisel’s mission is to create wealth management for poor people, to create a high-touch, high-quality service without the price. He says that the poor or not deemed ‘worth it’ for developing useful financial products that meet their needs. He believes this is caused by a lack of imagination in big banks, and that Fair Finance’s aims are to do exactly that.
Faisel Rahman is part of Wavelength’s speakers bureau. To view his full biography, find links to other videos and to book Faisel for a speaking engagement go to Wavelength Speakers Bureau Faisel Rahman.