University of Salford Manchester

Better access to sustainable finance

Through Community Finance Solutions (CFS), an award winning research and development unit of the University of Salford, Professor Karl Dayson has developed research focused on providing leadership in increasing the sustainability of micro-financial institutions (MFIs) that provide credit or loans to the financially excluded:

  • Increasing access to finance for excluded groups, reducing unmanageable debt and improving the quality of life;
  • Supporting public authorities in developing financial inclusion policies;
  • Changing EU policy, developing a model of sustainability and transparency for MFIs through the European Code of Conduct for Microcredit providers.

Improving financial inclusion

 
Through two Knowledge Transfer Partnerships (KTP) with East Lancashire Moneyline (IPS) Ltd.(ELM), Karl and his colleagues, Sunil Vadera form the University's School of Computing, Science and Engineering developed a web-based Credit Risk Assessment Tool (CRET) and a data control system for loan and savings account processing to aid in the processing of loan applications. Karl has worked with East Lancashire Moneyline (IPS) Ltd., since 2002 when the centre was founded and is a Board member, offering support and initiating the KTP with the School of Computing, Science and Engineering. 

Diane Burridge, Chief Financial Officer of the ELM commented that “The research has helped us to actually have the confidence to expand into more geographical locations. We ultimately want to make the business national, and it means more people who wouldn't necessarily have had access to the service will have access to affordable finance”. The project is the first of its kind in the sub-prime finance market. As of 2013:

  • Total number of loans since inception: 65045
  • Total value of loans: £37,225,431
  • Number of people having used the service: 25,264
  • Total amount in savings: £3,283,159 (this is the total amount deposited since inception, not the current value on deposit).

A founder member of the European Microfinance Research Network (EMRN) (2005), Karl led the editorial team that published the Handbook of Microcredit in Europe, which reviewed the experiences of 18 countries, highlighting variations in the characteristics of MFIs and their associated practices. As a result, Karl identified the emergence of a new model for the delivery of microfinance in Europe, leading to his being commissioned to develop a model for the European Community; the European Code of Good Conduct for Microcredit Provision, which provides a set of standards for management, governance, risk management, reporting, and consumer and investor relations that are common to the microcredit sector in the European Union.

Key document

European Commission, Directorate-General for Regional Policy (2011) Code of Conduct for European Microcredit Providers