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Microcredit in the UK

Microcredit in the UK

Research: context, objectives, and definitions

The objective of this thesis is to investigate the viability of group-lending microcredit as a tool for financial inclusion and livelihood development in the UK. Financial exclusion remains a reality for an excluded minority in the UK. Recent figures estimate that approximately 2 million adults in 1.3 million households remain 'unbanked' without a 'mainstream' bank account (HM Treasury, 2008). What is most concerning about this excluded minority is that firstly, the consequences of exclusion are more and more severe in an increasingly cashless economy and secondly, exclusion is concentrated amongst members of society who are least able to afford its socio-economic consequences.

Microfinance is one of several 'alternative financial institutions' which attempt to promote inclusion by providing credit and business support services to individuals excluded from mainstream finance. However, this study focuses on the group-lending element because it represents an attempt to replicate a development innovation from the 'south' in the UK context, and therefore constitutes a rare reversal of the usual directional flow of innovation.

The group-lending microcredit model, pioneered by the Grameen Bank in Bangladesh, refers to the lending of small loans for enterprise development to a group of 4-6 borrowers (rather than an individual), who then take on joint and several liability for that loan. This provides 'social collateral' and lower costs to the lender, as well as encouraging loan repayment through processes of social peer-pressure. This methodology has been fundamental to the success of microcredit in less industrialised developing country contexts.

The online survey

To investigate current academic and industry opinion, a set of 32 statements has been developed, which cover many of the important issues surrounding financial inclusion and microcredit in the contemporary UK context. What constitutes financial inclusion in the UK? What role can microcredit play? Is the group-lending methodology important? How will the financial crisis affect the provision of microcredit? This survey is an attempt to find out what people think about these statements and their corresponding discourses.

The survey uses Q-Methodology, a research method designed to study subjectivity and opinion. The value of using a 'forced' distribution of opinion, with a pre-determined number of statements for each category is to get respondents to rate their own subjective opinions against each other. The value that you put against a statement is not an absolute value, but is relative to how you feel about other statements. In your normal distribution, the statements at the extreme are chosen to be the ones that you are most passionate about. There may be others that you care about, but relatively less, so they find their way into the middle of the distribution.

(For further information see:

Results will be analysed using a Q-Sort programme, to facilitate a focused discussion and analysis of the 'outliers' i.e. those statements to which people agreed with the most or agreed with the least. Results will be used for discussion within thesis sections on the potential for group-lending microcredit in the UK, and the potential impact of the current financial crisis.

This study is being carried out by Joshua Phillips in the Department of Geography at the University of Cambridge. It is for academic purposes only, and can be kept strictly anonymous and confidential. The results will contribute to an MPhil thesis on group-lending microcredit in the UK context.

Survey instructions

  • Click the 'start the survey' button below.
  • Rank the 32 statements using the categories available, which range from +2 for 'agree the most', +1 for 'agree', 0 for 'neutral opinion', -1 for 'agree less', and -2 for 'agree the least' with the statement.
  • Fill the number of slots available for each category (+2 to -2) with the correct number of statements. The dots indicate when there are the incorrect (red) or correct (green) number of statements in each category.
  • Use the UPDATE button (top right) to apply changes. This can be done multiple times until all the survey is complete.
  • The survey is complete when 4 statements are placed in the +2 category, 7 statements in the +1 category, 10 statements in the 0 category, 7 statements in the -1 category and 4 statements in the - 2 category.
  • Once completed, click SEND (top right) to send the results directly via email - you will be prompted to give a word label for your data before sending.

For any help or further information on this study please contact Joshua Phillips <>.