Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions he has had with banks on participation in the small sum lending pilot set out in the Financial Inclusion Strategy; and what assessment he has made of the potential impact of small sum lending on reducing household reliance on high-cost lending and alleviating the cost of living.

The Government recognises that, when provided responsibly, credit can play an important role in helping people manage unexpected expenses and smooth their cash flow. Access to suitable, affordable credit products can support people’s financial resilience and wellbeing and help them achieve their financial goals. For this reason, improving access to affordable credit is a key area of focus in the Government’s Financial Inclusion Strategy, published last year.

The Strategy sets out an ambitious package of measures to improve access to affordable credit, including a pilot small-sum lending scheme to help encourage the role of mainstream lenders in the provision of affordable credit to underserved groups. The scheme is being ran by Fair4All Finance, with Monzo Bank announced as the first participant in June 2026.

HM Treasury are engaging closely with key delivery partners in relation to the Strategy’s implementation, including Fair4All Finance, to understand progress to date and how we can continue to build on interventions. This includes examining the success of pilots and relevant next steps, which will also be considered as part of the Strategy’s two-year review process.