Gregor Mowat

An accountant’s ambition to solve problems rather than crunch numbers.

Gregor Mowat’s accountancy career had taken him across the globe, but he found the problem he wanted to solve on his doorstep. He tells Smith & Williamson’s Hall of Fame how LOQBOX set out to tackle financial exclusion in the UK.

65 HOF Entrepreneurs Gregor Mowat 1920X800

Gregor Mowat’s accountancy career had taken him across the globe, but he found the problem he wanted to solve on his doorstep. He tells Smith & Williamson’s Hall of Fame how LOQBOX set out to tackle financial exclusion in the UK.

Financial exclusion is a major problem across the UK, with around 5.8 million people shut out from large parts of the credit market. It’s a Catch-22 – they’ve never had credit, so they can’t build a credit record.

This lack of access has far-reaching consequences. Many are forced to pay more for basics such as their phone or utility bills. At worst, they turn to expensive sub-prime lenders and succumb to a spiral of debt.

Gregor’s career as an accountant had taken him as far as Brazil, Thailand and Kazakhstan. He returned home with an ambition to solve problems rather than crunch numbers. He decided to build a career as an angel investor and began to look for the right business to support.

The rules he’d learned as an accountant influenced his thinking, but profit wasn’t his only motivation: “It had to be an industry I knew; it had to be scaleable and – importantly - it had to have a positive social outcome.”

The positive social outcome criteria narrowed his options. He found that those people who were trying to fix social problems were generally different to those who were trying to make money. Nevertheless, six months down the line, he was introduced to Tom Eyre who had set up Credit Improver, a business designed to promote financial inclusion. Having worked in emerging nations, he was well-versed in the social consequences of being stuck in the cash economy and was shocked that it was still such a problem in the UK.

What started as an angel investment quickly became a full-time job as the pair recognised the scale of the task ahead of them. “There are three things that drive financial inclusion,” says Gregor, “and if you don’t have any one of these elements, you are going to be excluded or you are going to make mistakes and then be excluded. The first one is opportunity – if you’ve never had credit, you don’t have a credit history, so you can’t get credit and you’re stuck in that loop.”

He also identifies a lack of capability. Finance isn’t well-taught in the UK, and multiple generations often don’t understand the basics. People genuinely don’t know what to do to improve their financial situation. There is also a notable lack of resilience. The Financial Conduct Authority (FCA) has found that 40% of UK adults cannot put their hands on £100:

“People are living hand to mouth. It means if anything goes wrong, you’re into payday loans. Equally, everything is more expensive – from pre-paid mobiles to utility bills,” Gregor says.

Gregor and Tom recognised that they needed to address these three problems to tackle financial exclusion. Credit Improver became LOQBOX, which was specifically designed to deal with these problems.

When people sign up to LOQBOX, they decide how much they can reasonably afford to save in a year. A 0% loan is locked away for the same amount in the LOQBOX. The user pays off the loan over 12 months – from as little as £20 a month - building a credit score as they go. Once the 12 months is up, the loan is released into a bank account. In the meantime, ‘LOQBOX Learn’ provides 24 basic emails on how money and credit scoring works.

Gregor says that the early stages were tough. Having identified the problem and built the solution, they thought people would rush to sign up, particularly when it was picked up by consumer finance site Money Saving Expert. They realised they needed to spread the word and began marketing through partnerships – aggregators, free credit report providers, lenders. Since then, the business has grown rapidly and is now cash flow positive. It has the backing of Lloyds TSB, Royal Bank of Scotland and NatWest.

The group has opened in the US in September 2020, where there may be 10 times the number of people ‘invisible’ to the credit scoring agencies. Gregor also plans to take LOQBOX to emerging countries such as Brazil, where there is a huge opportunity. He wants to help break the cycle, build better education and help people build their credit records across the globe.

Importantly, Gregor now sees the world changing. Profit and purpose are coming together. Investors recognise that solving a huge problem can be good business.

 

Uploaded: 06/05/21

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