9 June 2020

Raffaella Calabrese, Jake Ansell, and Tina Harrison are working on a new project funded by a Data-driven Innovation Grant, examining the challenge of accessing affordable finance after the COVID-19 outbreak.
Accessing finance after COVID-19 - people handling money with gloves

Project Background

Addressing the financial needs of vulnerable people is of great importance especially during the current COVID-19 crisis. As a result of the COVID-19 outbreak, one fifth of workers in Scotland are now furloughed. In the last month, Scotland has seen 130,000 new applications for Universal Credit, compared with 20,000 the same time last year. A large number of people who suddenly find themselves with no or limited income may require state benefits.

Given the high volume of applications, delays in receiving benefits are inevitable. Such delays could be financially harmful for households that do not have savings to draw on. Applying for benefits, for universal credit, pension credit, child benefits, council tax reduction, and heating benefit, among others, is a complex process. Individuals, often those with limited financial literacy, are required to search for key financial information in their bank statements. In the short term, they may require a loan to tide them over until they receive their benefits or support them during the lockdown period.

This project will address the specific challenge of accessing income benefits and affordable finance swiftly for those individuals who have suddenly been made financially vulnerable as a result of the current pandemic. Finding affordable loans is problematic for many people with limited credit history and/or no collateral. As new benefit schemes are being proposed to respond to the COVID-19 crisis, this process will be even more complicated.

An example is the furlough scheme in place, especially where employers have not topped up wages. The lessons learned from this project have the potential to improve design access and management of benefits into the longer term for financially vulnerable individuals in the Edinburgh and South East region, through our collaboration with partners based and operating in this region.


With data from Scotcash, and in collaboration with Inbest, an Edinburgh-based Fintech company, Raffaella Calabrese, Tina Harrison, and Jake Ansell will develop methods of assessing the reliability of loan seekers who lack traditional credit histories in paying back loans. For example, evidence from previous research at the University of Edinburgh Business School exploring financially vulnerable people without traditional credit histories demonstrated that using payment records for utilities provided an economically viable method for loaning money.


The project has three aims. Firstly, to try to speed up loan decisions for individuals within the current Scotcash approach, by further automation. Secondly, using information on entitlement to benefits supplied by Inbest to provide reassurance for lending by Scotcash to a wider group of individuals. Finally, to provide guidance on alternative criteria that might be applied to lending, specifically for those financially vulnerable without either long credit histories and/or those with no collateral.

Jake Ansell

Jake Ansell

Professor of Risk Management

Raffaella Calabrese

Raffaella Calabrese

Chancellor's Fellow & Senior Lecturer - Data Science

Tina Harrison

Tina Harrison

Personal Chair of Financial Services Marketing and Consumption