Monzo has launched a new pilot of its Flex Build credit card aimed at customers with low or limited credit scores.
The digital bank is working with financial inclusion charity Fair4All Finance to widen access to affordable credit for people “who otherwise struggle to access credit”.
The pilot expands Monzo’s Flex credit card proposition.
Monzo introduced Flex Build in 2024 for customers with weaker credit profiles. The updated version adds a deposit-backed route into small-limit borrowing, with the aim of helping customers build a repayment history over time.
Under the pilot, eligible customers make a one-time deposit. Monzo uses this as the basis for offering a small credit limit, with borrowing available up to £250 initially.
Customers pay 0% interest if they repay in full at the end of the month. If they choose to spread the cost, the product carries 39% APR.
According to Fair4All Finance, each transaction is repaid over a fixed term of 1 to 24 months, similar to a small-sum loan. The structure is designed to avoid “persistent debt”.
Flex Build includes measures aimed at preventing missed repayments from escalating. Monzo freezes spending if repayments are missed, providing customers with a seven-day grace period to catch up without affecting their credit score.
Customers who make regular on-time repayments may become eligible for higher limits over time. They can also reclaim their deposit and move towards mainstream lending.
Monzo Borrowing general manager Luke Enock said: “Our mission is to make money work for everyone, which means breaking down the barriers to financial progress. Too many people can’t access affordable credit, leaving them unable to manage essential costs or build the repayment history needed for future borrowing.
“With Flex Build, we’re introducing a new kind of credit product that helps people build a credit history and progress to mainstream options over time. By partnering with Fair4All Finance, we’re reaching thousands more excluded customers, taking a vital step towards a more inclusive credit system in the UK.”
The launch comes as Fair4All Finance estimates that more than 16 million UK adults face barriers to borrowing. The organisation said the figure has increased by around 30% since 2018.
Monzo is the first partner for Fair4All Finance’s Small Sum Lending Pilot, which is linked to the Government’s Financial Inclusion Strategy.
As part of the partnership, Fair4All Finance is providing a partial lending guarantee of up to £7m. The guarantee is intended to share risk and help scale the pilot to reach more customers.
