Stockton lender to help vulnerable households reduce debt costs with £5m investment

Responsible lender Five Lamps has secured a £5m investment to help vulnerable households break the cycle of high-cost debt.

By mobilising over £60m of lending, the funding will enable the Stockton-based organisation to offer more than 100,000 affordable loans under its Conduit brand.

It will be funded over six years by four charitable trusts and five social investment funds, representing the biggest single investment in a UK community lender to date.

Five Lamps has so far provided close to £40m of affordable personal loans, primarily in the North East but more recently in other parts of the UK.

The organisation said high-cost credit is an ongoing and widespread issue; 3.1 million UK adults have one or more high-cost loans, or have had one in the last year, with potentially vulnerable people twice as likely to have used high-cost credit.

Five Lamps chief exec Graeme Oram commented: “This is a truly transformational investment which will enable us to help up to 100,000 financially excluded people break the cycle of high-cost debt which blights the lives of so many in our communities.

“The Financial Conduct Authority ‘High Cost Credit Review’ published recently highlighted the need for more alternatives to high-cost credit and we at Five Lamps are delighted to be that different kind of lender. We are driven to make a difference to people’s lives.”

He added: “Too many people have little or no financial resilience and at times of crisis have little choice but to go to high-cost or, sometimes, unregulated lenders. We want these people to come to us.”

The social investment funds backing Five Lamps are Big Issue Invest, FSE, Social and Sustainable Capital, North East Social Investment Fund and Social Investment Scotland. The charitable trusts are the Esmée Fairbairn Foundation, the Joseph Rowntree Foundation, Harpur Trust and Barrow Cadbury Trust.

Lars Hagelmann and Peter Morris, investment directors at Big Issue Invest and Social and Sustainable Capital, said in a joint statement: “We are pleased to be playing a lead role in financing the next phase of growth of Five Lamps’ affordable personal lending. Five Lamps has been building its lending operation’s reach.

“Along with the other investors, we look forward to increasing Five Lamps’ capacity to support individuals who can benefit from access to fair and responsible credit.”