Monzo and Fair4All Finance launch pilot to aid excluded borrowers
The Flex Build initiative targets customers with limited credit histories, offering a £250 limit and a £7m risk guarantee to encourage responsible borrowing and credit score building.
Monzo has initiated a pilot program for its Flex Build credit card in collaboration with Fair4All Finance, aiming to provide affordable credit access to individuals with low or limited credit scores. The digital bank’s latest offering expands upon its existing Flex credit card proposition, which was introduced in 2024 to serve customers with weaker credit profiles. This updated iteration introduces a deposit-backed route into small-limit borrowing, designed to assist borrowers in establishing a repayment history that can eventually lead to mainstream lending options.
Under the pilot structure, eligible participants are required to make a one-time deposit, which serves as the foundation for a small credit limit of up to £250. The product is structured to avoid persistent debt, with repayments spread over a fixed term of one to 24 months, resembling a small-sum loan. Customers incur 0% interest if the balance is repaid in full by the end of the month. Alternatively, those who choose to spread the cost over the fixed term will face an annual percentage rate of 39%.
To mitigate risk and support the initiative, Fair4All Finance is providing a partial lending guarantee of up to £7 million. This financial backstop is intended to share the risk associated with lending to excluded borrowers and help scale the pilot to reach a wider audience. Monzo is the first partner for Fair4All Finance’s Small Sum Lending Pilot, an initiative aligned with the UK Government’s Financial Inclusion Strategy.
The launch addresses a significant gap in the UK credit market. Fair4All Finance estimates that more than 16 million UK adults currently face barriers to borrowing, a figure that has risen by approximately 30% since 2018. The partnership aims to assist thousands of these excluded customers by providing a structured pathway to financial inclusion, moving them away from high-cost credit options and towards more sustainable borrowing practices.
Monzo has implemented specific safeguards to prevent missed repayments from escalating. If a customer misses a repayment, spending on the card is frozen, but a seven-day grace period is provided to catch up without negatively affecting the customer’s credit score. Luke Enock, Monzo’s borrowing general manager, stated that the mission is to break down barriers to financial progress, allowing people to build the history needed for future borrowing. Fair4All Finance chief executive Kate Pender described the launch as a pivotal moment for financial inclusion in the UK.
