New payday advance app could help families avoid debt

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The borofree app allows employees to spend up to £300 in pay upfront at select retailers

Fintech company Borofree is to launch the app which will allow employers to offer staff up to £300 of their next salary to spend at select major retailers.

Unlike payday loan companies that charge up to 1500% APR, customers pay no interest and no fees and it is hoped this could help thousands of families avoid using high interest rate loans.

The app, which was set up with backing from investment firm Fortunis Capital, allows staff to spend their payday advance on 60 major brands including Amazon, Uber, Morrisons, Tesco, Currys PC World, Sky , Just Eat, John Lewis and The National Trust.

Minck Hermans, CEO of Borofree, said its mission is to put consumers back in control of their finances by disrupting an outdated personal finance market that is creating a “vicious circle of debt by punitive interest”.

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He said: “Now is the time to solve one of the UK’s biggest problems. Half of households can’t afford an unexpected £300 bill – while financial worries are Covid-19’s biggest mental health burden.

“Many people are forced to borrow at high interest rates to pay for the basics of life and we fundamentally think that’s a mistake.

“Interest is the enemy and together we must fight to eradicate it, especially for those who cannot afford such high costs but must use credit to make ends meet.”

Data from the Citizens Advice Bureau shows that over the past 12 months nearly 22,000 people in the North East have sought debt advice.

Borofree said there was significant interest from employers interested in signing up to offer the app to their staff.

Mr. Hermans added, “Every business leader we speak to agrees that reducing financial stress helps improve productivity, reduce absences and increase well-being. Above all, it is the right thing to do.

He said Borofree was ahead of the sharing economy curve: “It may have started with Uber, but the next revolution is in financial services, where we use technology to build direct relationships between customers and retailers.

“Legacy legacy systems are complex, inefficient and outdated. It is unacceptable for consumers to pay the price for this inefficiency with unfair interest rates, whether in credit card fees or payday loans. We want to break the old model and free millions from the burden of interest bearing debt.

Justin MacRae, chief operating officer of Fortunis Capital, said that in the UK alone they have identified 27 million people who manage roughly and who regularly have to borrow at high interest rates for income products. basics such as food and heating.

Mr. MacRae said: “Borofree is one of the jewels in our crown. This aligns with Fortunis Capital’s mission as a leading impact investor – to tackle a global problem that affects millions of lives, then find the solution through innovation and technology.

“In this case, a movement to break this vicious circle of debt that enslaves families.

“This first 1,000,000 is a big step, but the market here in the UK and abroad is huge and the next goal is to help more and more people get out of debt.”

Borofree organizes demonstrations of its product via borofree.com.

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