Monzo and Fair4All Finance, a not-for-profit organisation dedicated to improving financial inclusion, have announced a joint initiative to extend access to affordable credit for the more than 16 million UK adults who currently face barriers to mainstream borrowing, a number that has grown by roughly 30% since 2018.
The partnership centres on a new version of Monzo’s Flex Build product, an existing credit card feature launched in 2024 and aimed at customers with low or limited credit histories. The updated pilot introduces a one-time deposit model that unlocks a credit limit of up to £250, offering an entry point for individuals who would otherwise be unable to access credit. To support the pilot’s expansion, Fair4All Finance is providing a partial lending guarantee of up to £7m, with both organisations sharing the risk of extending credit to customers with thin or poor credit files.
The product is structured to help customers establish a repayment track record and eventually transition into mainstream credit. Repayments are spread over fixed terms of between one and 24 months, and customers who meet repayments on time can unlock a limit of up to £500, reclaim their initial deposit and graduate to standard lending. The product charges 0% interest when balances are settled in full each month, and 39% APR for those who spread the cost. There are no charges for early or late repayments. If a payment is missed, Monzo suspends spending and offers a seven-day grace period before any credit score impact occurs. The app itself incorporates educational features and design elements intended to reinforce positive repayment habits.
Monzo was selected as the first partner for Fair4All Finance’s Small Sum Lending Pilot, which sits within the Government’s Financial Inclusion Strategy and aims to bring a broader range of small-sum credit products to market. The two organisations have also committed to sharing findings from the pilot with policymakers, regulators and the wider industry to help shape more inclusive lending products across the sector.
Monzo general manager of borrowing Luke Enock 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.”
Fair4All Finance CEO Kate Pender 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.”
Economic secretary to the Treasury Rachel Blake MP 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.”
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