Debt Talk: Poverty & ethnicity premium

Another thought-provoking podcast on Debt Talk is ‘Poverty & ethnicity premium’. This time, leading experts from academia, think tanks, debt advice, and funders spoke about issues that matter in financial services.

Maria Booker from Fair By Design explained the poverty premium and how communities are paying more and being financially discriminated against because many can’t afford to pay by direct debit and are also on low incomes. This is particularly the case with paying for insurance and fuel or customers who pay a fee for withdrawing cash from a cashpoint when they have no alternative option.

Sara Davies from Bristol University explored how many customers are directly impacted by services in the retail finance sector based on her research on those digitally excluded or affected by disability. However, when one product has been regulated, others seem to come into the market to exploit vulnerable customers.

Jerry, during MBE from Money A&E, passionately spoke about how direct and indirect discrimination exists when the system disadvantages minority communities. He emphasised that Muslim South Asian communities may find that financial products are not Sharia compliant and the Afro-Carribean community may end up paying more towards mortgages compared to their white counterparts. He argued for representing such communities in product development processes to drive change.

Ayesha Begum from Fair4All Finance, which published ‘Levelling the playing field—Building inclusive access to financial services for people from minority ethnic groups’, explained that minority communities face multiple barriers and exclusion in financial services while also experiencing frequent financial shocks compared to their white counterparts. When mainstream lenders do not support some minority communities, they turn to their community or fintech companies due to a lack of trust from mainstream lenders.

My guests also provided TOP TIPS to listeners of Debt Talk for regulators, policymakers, customers and businesses. The following podcast will be on ‘UK Waters & Our Bills.’ Thank you for listening to the Debt Talk podcast with your host, Ripon Ray.