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Alternative options providing alternatives for U.K.'s underbanked citizens 

Feb 20, 2013 Sean Albert

The lending market has been relatively stagnant in the United Kingdom in recent years, with a compound annual growth rate of 0.2 percent from 2007 to 2011, according to Technology Spectator. 

However, with the emergence of several viable alternative lending strategies, U.K.'s underbanked citizens will likely have more options going forward.

"The short term lending sector is growing significantly in the U.K. and plays a vital role for those individuals who are unable or unwilling to use traditional banking services for those borrowing needs," said Greg Rable, CEO of LendProtect. "It is vital that lenders in this sector extend credit responsibly and effectively."

Different scoring methods continue emerging, including a Payment Reporting Builds Credit scores, which uses monthly utilities accounts payment information and other factors to compile a more comprehensive score. For many clients, this has resulted in a 25 to 30 percent bump in consumer credit scores, according to a recent FactorTrust report.

In a recent blog post for Technology Spectator, Brett King, a financial services consultant, discussed the ways new technologies, like smartphones and social media, have allowed short term lenders to provide cheaper alternatives for consumers. In particular, King pointed out prepaid debit and credit cards and P2P lending as measures that have benefited underbanked citizens.