Finance: Fair Finance urges mainstream banks to disclose lendingdata

Ethical lending organisation Fair Finance has published a list by gender and location of every loan it has made since its launch six months ago.

The east London-based social enterprise says it will produce regular disclosure reports in an effort to persuade mainstream banks to do the same.

The organisation, which offers low-interest loans to poorer communities targeted by moneylenders, also campaigns for fairer financial services.

The Fair Finance report shows that 39 of the 56 personal and business loans it has made since April have gone to women and 17 to men. Of the loans, 42 have gone to people in the London borough of Tower Hamlets, nine to Hackney and five to Newham.

"Everyone thinks they get a raw deal from their bank," said Faisel Rahman, managing director of Fair Finance. "And many, especially minorities, women and poor communities, believe that banks discriminate against them on purpose. Fair Finance challenges all banks and lending organisations to disclose all of their lending data so we can see if there is any truth to this or not."

Banks in the US have to prove they are not excluding any communities by making mandatory disclosures, and $1.3 trillion (£564bn) has been invested in areas that had previously been ignored.

The Government has twice asked for voluntary disclosure of lending data in the UK, but only Barclays and NatWest have revealed the extent of their lending to poorer communities. But this is limited to 5 per cent of the most deprived areas of the country. Fair Finance argues that if banks do not voluntarily disclose more, the Government should introduce legislation similar to that in the US.

Jon Aldenton, chair of Fair Finance, said: "We believe we have nothing to hide about where or to whom we are making loans. By disclosing our lending data, we believe we promote transparency for our services and accountability to the public for our activities."

Brian Capon, head of media relations at the British Bankers' Association, said: "There is no mandatory requirement in the UK for banks to disclose this type of information, although some do so voluntarily.

"Naturally, banks are free to choose for themselves whether this is something they wish to do."

Fair Finance's next disclosure report, due in February 2006, will profile its lending to ethnic minorities.

FACT FILE

Fair Finance has made available a list of every loan it has made by gender and location

The organisation hopes to encourage other banks to do the same and to find out whether there is any discrimination in lending

The Government has twice asked for voluntary disclosure of lending data, but only two banks have published any information on lending to poorer communities

Fair Finance argues that if banks do not disclose more information, legislation should be introduced compelling them to do so.

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