No Interest Loan Scheme Pilot Evaluation and other financial inclusion project evaluation support

Continued from 11.1.4 We are open to providers proposing the methodology they plan to use to meet the aims and objectives of this work, but we anticipate that it will comprise the following principles: Process evaluation The process evaluation should analyse the efficiency, effectiveness and suitability of the NILS pilot processes (including design, set up, delivery, referrals and performance) in order to identify improvements that can be made during the pilot, and test whether there is way to build a long-term, sustainable, permanent solution. Financial services evaluation work specific on loan or other relevant financial services products will be essential. Borrower perspectives on the NILS experience will be crucial and therefore bidders will need to demonstrate strong qualitative techniques engaging with people in vulnerable circumstances. Impact evaluation We expect the impact evaluation to have two key elements - a social impact review and an economic impact review. Social impact evaluation The social impact evaluation should assess if there are positive customer benefits resulting from the NILS loans, as delivered by the 5-7 lenders involved in the pilot. We would expect this to consider both qualitative and quantitative evidence and seek to answer at least the following questions: What impact - if any - does access to a NILS product have on financial wellbeing and resilience for low-income households currently excluded from access to mainstream or affordable credit? What is the short and long term impact? What are customers able to do having accessed a NILS loan which they wouldn't otherwise be able to; has it enabled them to access more mainstream financial products and services? What are the impacts outside of a customer's initial financial position - on their wider life, mental health, physical health, their children's wellbeing, their employment/education/training situation, their housing situation? Economic impact evaluation The economic impact evaluation should assess whether there are wider societal benefits generated as a result of the NILS scheme, such as changes in employability and economic activity, income, physical and mental health, and ability to engage in society, eg avoiding benefit uptake, and may result in findings that the NILS scheme generated a £X cost saving for society. To support this evaluation we will have data about the actual cost of delivery through the open book accounting arrangements we have with lenders and require a cost benefit analysis to examine the optimal delivery model reflecting on the range of models we are testing in this pilot with varying degrees of automation and borrower support. NILS core pilot evaluation timelines The evaluation will run alongside three proposed waves of lending. The pauses between each wave will allow for a review of learnings through an interim report, which will inform any changes to the pilot ahead of the subsequent wave. We expect evaluation and outcome data to be captured in to 2025/26 after the lending ceases in order to assess bad debt rates and the commercial lifetime value of the NILS customers who may transition to longer-term, interest-paying customers with the lender. The final evaluation is needed in early 2026. Additional information: Background information on this requirement is available from Georgia Kewley at georgia@fair4allfinance.org.uk