Pathway Fund’s Response to the Government’s Financial Inclusion Strategy
Pathway Fund Provides its Response to the Government’s Financial Inclusion Strategy
Overview: The Strategy - and Pathway’s Position
The launch of the Government’s Financial Inclusion Strategy is a welcome step forward. For too long, the financial exclusion of Black and Ethnically Minoritised (BEM) people has been treated as a side issue, something to be addressed only when convenient.
At Pathway Fund, we’re clear: this work belongs at the centre of the agenda. Access to fair, affordable financial services isn’t a luxury — it’s a baseline necessity. And we intend to make that unmistakably plain in everything we do.
We recognise the effort that has gone into producing this strategy. It sets out important ambitions: widening access to banking; credit; insurance; and savings.
It has been positive to see the Government stating that it will be embedding inclusive design into its financially-oriented policymaking, moving forwards. Indeed, the strategy includes, many, encouraging signals that financial inclusion is being taken increasingly seriously by those with power, in this country. But while the strategy lays a foundation, it leaves some material questions unanswered.
The Reality of Exclusion
Financial exclusion is not abstract. It is lived every day by BEM people, people who cannot open a bank account, who are denied affordable credit, who are left unable to save, or who face debt without access to culturally appropriate advice. For BEM communities, these challenges are compounded by systemic bias and historic inequities.
The impact is profound. Without access to the basics – banking, credit, insurance, savings — families remain vulnerable to shocks. They cannot plan for the future, build resilience, or escape cycles of hardship. Financial exclusion leaves people unable to drive inclusive growth, with their brilliant business, charities, and social enterprises. It, crucially, locks them out of the opportunities that others take for granted.
Welcome Signals
There are elements of the strategy we, at Pathway Fund, support. These include:
Inclusive design: building financial products with inclusion at their core is essential. Too often, services are designed for the majority and adapted later for the BEM communities, left behind. Starting with inclusion can begin to change that;
Meaningful commitment: the Government’s decision to increase the funding that it has afforded to Fair4AllFinance, by some £132.5 million, is positive to see;
Commitment to access: expanding access to banking, credit, insurance, and savings is vital. These are the building blocks of resilience and we will work to see that commitment to benefit BEM communities, in turn; and
Building community: the strategy’s commitment to supporting community finance, including Community Development Finance Institutions, is positive to see, particularly when that work is aligned to its improving of financial education, for young people;
Opening the System: the strategy, specifically aims to bring UK working age adults – including BEM people – with £1,000 - £2,000 in savings – into the system, encouraging them to bank, save, and invest, with that money; and
Mental health recognition: debt and financial stress are not just economic issues – they affect wellbeing. Our listening series showed us that recognising mental health as a crosscutting theme, in the financial inclusion space, is important. So, this is an important step toward some somewhat more holistic solutions, for BEM communities;
These commitments matter. They show that government is listening. But listening is only the first step.
Government Must Go Further
The strategy leans heavily on industry – particularly the mainstream, institutional, limb, of the financial services sector – to drive innovation and change. Industry has a role, but it cannot be the sole driver. Too often, solutions are designed from the top down, without meaningful input from the communities most affected.
We are also concerned about the extensive concentration of new funding for debt advice into mainstream services. Evidence shows that underserved groups are often excluded from mainstream provision. Without investment in community led, culturally appropriate services, those most affected by systemic bias, poverty, and problem debt risk being left further behind.
Finally, but perhaps most importantly, Pathway Fund feels it to be important that the Government be clear in naming the nature of the financial exclusion, that it is writing on, in this strategy.
We see ethnicity, rarely, mentioned. We do not see BEM communities, specifically, analysed. Why not? It’s important that we begin to look inequity in the face – so that we can end it.
Our Approach
At Pathway Fund, we are showing how innovation can be done differently. Following our extensive stakeholder engagement process, coming in the form of our regional listening series, we have been exploring and testing product and service design, grounded in the everyday experiences of those who will benefit most.
That series saw us visit our communities, in areas like Hyson Green, Nottingham, Accrington, and Liverpool 8. We have heard them, we are learning from them, and we will be working to design solutions that work for them, too.
This is not theory – it is practice. Unlike this strategy, we have worked to engage with the communities that it is serving and will be working to ensure that its delivery benefits them, too.
Community led approaches ensure that solutions are culturally relevant, interconnected, and responsive to real needs. They bridge the gap between decisionmakers and BEM communities, a gap that still remains far too wide.
We remain committed to advocating for: inclusive social investment, targeting BEM communities; an uptick in the number of BEM-led fund managers; BEM-led housing initiatives; community led debt advice and financial education; culturally appropriate services that reflect lived experience; and holistic approaches that integrate financial support with wellbeing.
Bridging the Gap, Moving Forwards
The strategy can be seen as a foundation, but the distance between decision making and the communities affected is still vast. Indeed, as eluded to, that distance was evident in a process that included only mainstream sector input. It has not gone unnoticed.
Bridging this gap is essential. Financial inclusion cannot be achieved if those most affected are excluded from the conversation. Policy must be shaped with communities, not for them.
In the short term, Pathway Fund will continue to champion successful community led approaches. In the long term, we are working with partners, regulators, and government to tackle structural imbalances. This will require reimagining the financial system – not tinkering with structures that, for many, are already broken.
A Call to Action
At Pathway Fund, we are pleased to be working to ensure that the financial sphere is ever more inclusive, for BEM communities. And we call on our allies, to collaborate with us, in that work.
We work closely with our partners, Better Society Capital, Access – The Foundation for Social Investment, the Impact Economy Collective, and crucially, sector leads, like Rooted Finance, the APPG for Ethnic Minority Business Owners, and the Black Equity Organisation, to see that vision, delivered upon.
Our mission is not simply to encourage the involvement of BEM communities, in the financial system, as it exists, but to reshape it for good. We believe in the resilience of excluded communities and in the possibility of building a financial system that works for everyone.
Next Steps
That’s why we’ve just launched our 2026 – 2029 strategy, ‘Investing in an Equitable Future’, alongside our ten regional listening papers.
In that strategy, we detail the way in which we will be supporting financial inclusion, by investing initially, in four of England’s regions, with a portion of the £12 million, in dormant assets capital.
We will be developing BEM-led charities and social enterprises, in a place-based manner. We will be supporting an increasing number of BEM-led fund managers. And moreover, we will be creating the superstructure so as to see financial inclusion improved, in a self-perpetuating manner, over the long-term, with our endowment.
Momentum for BEM-led, community driven, wealth building is growing. Across the UK, organisations, activists, and communities are demanding change. They are refusing to accept exclusion as inevitable. They are insisting on their right to participate fully in the financial system – and we, at Pathway Fund, will be supporting them, every step of the way.