The founder of the UK’s leading online accountancy firm for small and micro businesses is one of a group of entrepreneurs which developed an innovative way for self-employed people to get swift financial help during the coronavirus crisis.
Lucy Cohen of Bridgend-based Mazuma is among the group of UK fin-tech entrepreneurs which has developed a proof of concept. The work was done in just one weekend in an online collaboration between the self-isolating business people.
The prototype proof of concept allows the self-employed to go to a website and generate a self-declaration of loss of income due to coronavirus verified by banking data.
The team of innovators believe this can be made possible through open banking.
This would collect historic banking data, prove previous income and predict future loss of income.
It could ease the significant administrative burden on the civil service and the already stretched banking sector and ensure Britain’s small business sector makes it through this crisis.
Banks could release loans faster to businesses, meaning entrepreneurs could bounce back faster from disruption.
The self-employed are required to self-certify at https://covidcredit.uk/ using a simple web form. With consent, Covid Credit will then securely access twelve months of data from the individual’s bank account, using open banking, demonstrating historic incomes, and potential loss of earnings. The result is a minted declaration document that serves as self-certification by the sole trader.
“While the UK Government and Welsh Governments have taken significant steps to ensure the long-term viability of the economy in this crisis, we must do more to help the self-employed.
“The Federation of Small Business estimates that one in eight people in Wales is self-employed, more than 210,000 people.
“Across the UK, the self-employed and small businesses put £275 billion a year into the economy. It’s a hugely important sector and one which is close to our hearts at Mazuma. We have many self-employed clients who are now dealing with an unprecedented situation. Many are worried about whether their businesses will survive.
“We must support them now to ensure they not only survive but thrive. They are crucial to the economic success of our country and will be the drivers for recovery after the crisis is over.
“Because of the feedback we got from our self-employed clients in recent weeks, I knew how important it was to be part of this group, to develop effective methods to help them access support quickly.
“The Covid Credit now plans to share the work with the widest possible audience and to trial with a small group of self-employed in the coming days.”
The project has been created in open source so that it is simple to use and can be rapidly adopted by UK Government.
The team is now engaging with key stakeholders across HMT, HMRC and the FCA in a bid to move into a beta testing phase then to a wider roll-out.
The fintech consortium includes Credit Kudos, Fronted, 11:FS, Coconut, Capital on Tap, Mazuma, SeedLegals and TrueLayer.