Written by: Koray Can Oztekin
According to a recent Equifax report, credit card spending reached historically high levels and caused a year over year increase of 17% in delinquent payments. Furthermore, TransUnion reported that the average monthly minimum payments increased by 9% for credit cards and 35% for lines of credit since Q4’22. Such an increase in financial expenses is impacting the affordability of housing due to limited budgets and deteriorating financial and mental health.
A person’s financial situation and their mental health can have implications not only on themselves but on their communities as a whole. This includes, but not limited to, their engagement at home, at their housing communities and at work. More than 40% of the renters are in core housing need- spending more than 30% of their income on rent – therefore anything that helps them to better manage this expense would create positive ESG value through social / community engagement.
ESG, community engagement and financial health
Community engagement is one of the key pillars of Social, the “S” in ESG. Let’s list out all the community members who benefit from the improved financial health of renters:
Financial health can have significant implications on families specifically:
- Stress and Anxiety: Financial stress can lead to anxiety, depression, and other mental health issues for family members. The constant worry about bills, debt, and the ability to make ends meet can take a toll on a person’s emotional well-being.
- Relationships: Financial issues can put a strain on relationships between family members, particularly between spouses. Money problems can lead to arguments, disagreements, and even divorce.
- Health: Financial hardship can impact a family’s physical and mental health. Families may not have access to nutritious food, quality healthcare, or safe living conditions.
- Education: Children from financially insecure families may struggle to access quality education. They may have limited access to resources such as books, technology, or tutoring services, which can limit their academic success.
- Future planning: Financial struggles can make it challenging for families to plan for their future. This can include saving for retirement, paying for college, or housing insecurity.
Overall, financial health is critical to the well-being of families. It can impact their relationships, physical and mental health, education, and ability to plan for the future.
Improved housing affordability can also improve relationships in housing communities between neighbours, landlords, and residents. When residents can afford their housing, they are more likely to take pride in their homes, build connections with their neighbors and stay longer as a resident. Additionally, landlords are more likely to invest in maintaining their properties, leading to better living conditions for residents.
in 2022 alone, employees’ financial stress cost employers $40B. Improved housing affordability can provide significant value for employers. When employees can afford their rent with peace of mind, they are less likely to experience financial stress, which can impact their work performance. This, in turn, can lead to increased productivity, reduced absenteeism, and increased employee retention.
Employee retention is a critical factor for employers. When employees have affordable housing options, they are more likely to stay with their current employer long-term. This reduces the costs associated with recruiting, training, and onboarding new employees.
Rent payments that improve financial health
There are two amenities linked to rent payments that build substantial ESG value by enhancing Social impact/ Community engagement.
- Rent reporting: Rent payments can now build credit which is critical for more than 7M Canadians with thin credit file to reduce their financial expenses and get access to better financial products. It’s only fair that renters are get rewarded for the biggest expense of the month and the positive financial behavior.
- Flexible rent payments: Landlords can offer flexible rent payments to make it easy for renters to transform budget from a concept into execution. Renters do that by aligning their rent payments with their paychecks. Regardless of their income level, renters can split their rent payments to smoothen their cashflow and reduce the mental stress prior to the 1st of the month.
Zenbase is partnering with mission aligned landlords to offer these two financial health amenities to Canadian Renters. If you have any questions how Zenbase can work with your existing systems please let us know.
Philipp Postrehovsky | Zenbase COO
Philipp is a marketing leader, brand builder and product visionary who has been involved in the fintech scene for over 17 years. In 2013 he co-founded RentMoola, which continues to be one of North America's leading fintech companies with the mission to eliminate the rent cheque and modernize rent collection for the enterprise. Before that, he was a marketing leader for Mogo Technologies, Wonga Canada and began his career at Electronic Arts. Most recently he was SVP, Marketing at Progressa and VP, Digital Marketing at goeasy. He founded Grind For Kids, a program that raised over $1 million for BC Children’s Hospital Foundation and is a mentor to new entrepreneurs.