Monzo and Fair4All Finance to Widen Access to Credit, as Millions Remain Excluded From Mainstream Lending

WHY THIS MATTERS

The landmark partnership between Monzo and Fair4All Finance, announced on June 8, 2026, represents a crucial step forward in addressing the UK’s systemic financial exclusion crisis. Mainstream financial systems have increasingly shut out individuals with low, thin, or damaged credit profiles. A staggering 16 million+ UK adults now face significant barriers to borrowing—marking a massive 30% surge since 2018, driven by years of inflationary pressures and tightening macroeconomic credit appetites.

Historically, when individuals are rejected for mainstream credit cards or short-term bank loans, their underlying need for capital does not disappear. Instead, they are forced to rely on informal borrowing from friends and family, high-cost unarranged overdrafts, or high-interest, unregulated lenders. These options frequently trap consumers in a cycle of persistent debt without offering any structural way to improve their credit profile.

Monzo, the UK’s leading digital bank, and Fair4All Finance, a not-for-profit focused on improving financial inclusion, announce a new partnership to widen access to affordable¹ credit, as 16m+ UK adults face barriers to borrowing – a figure that has increased around 30% since 2018.² 

When refused mainstream credit, many turn to borrowing from friends and family, overdrafts or unregulated lenders. These options can increase financial pressure, while doing little to improve people’s ability to access affordable credit in the future.

A new, inclusive approach to credit

In 2024, Monzo expanded its flagship Flex credit card, introducing Flex Build, designed for people with a low or limited credit score. Together with Fair4All Finance, Monzo is piloting a new version of Flex Build, with a one-time deposit that unlocks a small credit limit of up to £250. This provides a vital entry point for customers who otherwise struggle to access credit. 

With in-app education and extra safety nets, this new deposit-backed version of Flex Build helps customers build a repayment history and progress to mainstream credit over time. Key features include: 

• Access to small, manageable limits of up to £250 initially, with the opportunity to double this limit with regular on-time repayments.
• Affordable credit: customers pay 0% interest if they pay in full at the end of the month or 39% APR if they want to spread the cost of a transaction.
• Clear, structured repayments: Each transaction is repaid over a fixed term of 1-24 months like a small sum loan. This prevents persistent debt, while giving customers the flexibility of an ongoing credit line. 
• Transparent costs: A clear breakdown of costs in pounds and pence, showing how total borrowing costs vary by repayment term.
• No hidden fees for early or late repayments.
• Safety nets: Monzo freezes spending if repayments are missed, and gives seven days’ ‘grace period’ for customers to catch up, without impacting their credit score.
• Education is built into the app experience with delightful touches of design throughout that encourage a ‘streak’ of on-time repayments and celebrate progress.
• A bridge to mainstream credit: Through regular on-time repayments, customers can unlock higher limits, reclaim their deposit, and progress to mainstream lending over time.

Scaling innovation to support wider change

Monzo was chosen to be the first partner for Fair4All Finance’s Small Sum Lending Pilot, which aims to bring more small sum credit products to the market, as part of the Government’s Financial Inclusion Strategy. 

This partnership enables Monzo to scale the pilot of Flex Build to reach thousands more people that struggle to access mainstream credit and gather the insights needed to learn how to sustainably serve this group of customers. Fair4All Finance is providing a partial lending guarantee of up to £7 million, sharing the risk with Monzo of lending to customers with limited or low credit scores.

Monzo and Fair4All Finance will share their findings with policymakers, regulators and the wider industry to inform the development of more inclusive lending products across the market.

Luke Enock, General Manager of Borrowing, at Monzo, said:

“Our mission is to make money work for everyone, which means breaking down the barriers to financial progress. Too many people can’t access affordable credit, leaving them unable to manage essential costs or build the repayment history needed for future borrowing. With Flex Build, we’re introducing a new kind of credit product that helps people build a credit history and progress to mainstream options over time. By partnering with Fair4All Finance, we’re reaching thousands more excluded customers, taking a vital step towards a more inclusive credit system in the UK.”

Kate Pender, CEO, Fair4All Finance said:

“The launch of this pilot is an important moment for financial inclusion in the UK as Fair4All Finance and Monzo work together to improve access to affordable credit for those who are often shut out. By partnering with Monzo we are able to scale up a product with the potential of serving thousands more people, backed by a robust guarantee structure.

This is the first step in delivering on the Government’s ambition to improve financial inclusion in the UK with the roll out of a large-scale partnership with a mainstream bank and we look forward to working with Monzo on this. We also look to the evidence from the United States where six of the eight largest banks deliver an equivalent product at scale, and we encourage the rest of the UK banking sector to come forward and work with us to deliver new products and solutions to improve access to credit through small sum lending.”

Diana Kamil-Salmon, Associate Director of Commercial Propositions, Fair4All Finance added:

“We are delighted to work with Monzo to structure a partial lending guarantee that enables them to serve more customers with the potential to widen access to credit for thousands of people. It’s a brilliant example of what private and public partnership can look like to amplify social impact.”

Rachel Blake MP, Economic Secretary to the Treasury, commented:

“Improving access to responsible credit is a central part of the Government’s Financial Inclusion Strategy and this pilot marks strong early progress in delivering on that ambition. Monzo’s participation is an important step forward, helping to test what role mainstream lenders can play in supporting currently under-served consumers to manage unexpected costs and build financial resilience. I welcome Monzo’s leadership in this space, alongside Fair4All Finance’s work to test practical solutions that can be scaled over time.”

FF NEWS TAKE

Monzo is leveraging its tech-native platform and massive user footprint to pioneer an innovative underwriting model for sub-prime credit in the UK. While traditional high-street banks typically rely on backward-looking, automated credit bureau scoring models that instantly filter out thin-file applicants, Monzo is deploying a highly successful strategy popularized by major retail banks in the United States: secured credit building.

Under the guidance of Luke Enock, General Manager of Borrowing, this specialized pilot version of Monzo Flex Build introduces an intelligent risk-mitigation framework. Eligible consumers place a one-time deposit with the bank, which serves as physical collateral to unlock a modest credit line of up to £250. This allows the bank to safely extend credit to historically high-risk demographics.

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