We all know LOQBOX as the innovative company that's fighting against financial exclusion and helping people become the masters of their own credit history.
“We believed that if we could create a solution that allowed us to give anybody the opportunity to manage a traditional credit product we could almost instantly erase the no/thin file credit problem. By linking this with the act of saving and the art of financial education we knew that we could create a group of well informed, capable, resilient consumers who would become the prime borrowers of tomorrow”
Join us in talking to one of its founders, Tom, and learn more about how it came into being, how its founder's see it developing, and get some great advice!
Thank you for taking the time out of your busy schedule to sit down and chat with us. To begin with, could you please tell us what motivated you to set up LOQBOX?
LOQBOX came about as a natural evolution of a previous product we launched called Credit Improver. Working in financial services around the globe I’d seen the impact of financial exclusion in various emerging markets but it wasn’t until I saw it first hand in the UK that I realised what a silent problem it was for millions of people in the UK. About 8 years ago my sister got her first job in the City after University. She had a good job, a good income and was ready to start living an independent financial life. Renting her first flat and getting credit for the sofa for her flat both proved to be uphill struggles. This really brought the issue of credit exclusion home to me. My sisters predicament is the same as faced by millions of people up and down the country. She was financially responsible, but she had no credit history to prove it. And this wasn’t her fault. I knew then that if I designed a solution that provided an opportunity to people like my sister we could help the effort to eradicate financial exclusion.
What were the biggest challenges you faced in the beginning when setting up LOQBOX?
Like all start-ups, have been more challenges than I could possibly have imagined. However, I think the biggest challenge was the simple fact that we were doing something completely new. There was no precedent for what we had built, so everything had to be researched, developed and explained in minute detail over and over again. Carving out the first business of its kind is difficult.
How do you see LOQBOX growing and changing in the next 2-3 years?
We’ll be taking LOQBOX around the globe, to a number of markets where financial inclusion can benefit hundreds of millions of people. We’re also listening to our users to understand what other challenges they’re facing, so we can help to develop solutions that deal with as many of the challenges they face as possible. So in 2-3 years I’d expect to see LOQBOX solving financial inclusion issues around the globe.
Who is your target audience and how do you think LOQBOX can make a real change in their lives?
Our target market is the financially excluded. The difficulty with financial exclusion is that it is demographic agnostic. It can impact anyone at any time. That being said, our users break down into two broad groups – No/Thin file and those with historic adverse credit. The first group are those who have, through choice or circumstance, little or no borrowing history. This includes young people, those new to the country, returning expats, ex armed forces and those who have chosen not to borrow in the last 6+ years. The latter group are those who have for one reason or another had problems managing money in the past. We believe that everyone deserves a second chance to prove they are now able to manage credit, and LOQBOX can do that for these people.
In both instances we do something very simple. We give everyone the opportunity to prove they can manage a monthly payment. This builds their credit with all three credit reference agencies and enables future lenders to see that the individual is able to manage repayments. While this is happening LOQBOX is building the users a pot of savings. And to top it off we offer a free financial education series to all of our users which builds their financial capability.
Finally, what is the most important piece of advice you could give to someone who is looking to start managing their own money?
Be realistic. I see lots of people, especially at this time of year, who set themselves unrealistic financial targets for budgeting and saving. And in most cases, it’s the unrealistic nature of their targets that causes them to fail. Set small goals which are achievable. Each little victory will spur you on the achieve the next. There is nothing complicated about good money management, everyone can do.