// Iceland is set to launch an interest-free customer loans scheme to help shoppers during the cost of living crisis.
// During a pilot phase of the scheme, customers paid interest on loans but the retailer has now decided to make all loans completely interest-free for the national roll-out
Iceland will be launching an interest-free customer loans scheme to help people through the cost of living crisis, in partnership with ethical lender Fair for You.
The frozen foods retailer will provide small loans initially with a £100 interest-free credit.
Shoppers who join Iceland’s Food Club can benefit from micro loans that are made available on a pre-loaded card, with repayments set at £10 per week. They can then choose which day of the week they make their repayments and may also overpay.
Iceland said that it had been working with Fair to You and testing different options for the past two year on a pilot with more than 5,000 customers.
The scheme is part of Iceland’s wider Doing it right; right now strategy that is designed to support the communities it serves.
Iceland has specified that customers can only take out one loan at a time during six windows throughout the year which coincide with school holidays.
The business said that by limiting loans in this way it will ensure that they will only be used to “smooth out” incomes rather than being relied on all year round.
It added that its trial micro loans of between £25 and £100 resulted in 92% of customers who had been turning to food banks, stopping or reducing their reliance.
Another 71% said they were less likely to fall behind on rent, council bills and afford other essentials.
Iceland Foods managing director Richard Walker said: “More than ever, people are struggling to purchase much needed everyday items during this relentless cost of living crisis, and fresh thinking is required by business and government to find workable solutions.
“At Iceland, as part of our Doing it right: right now we’re constantly exploring new ways to help our customers with innovative solutions that deliver real impact.
“With Fair for You, we have rolled out Iceland Food Club to offer our customers even more support, helping them manage essential spending on their own terms. To those striving to worry less about how they will afford essential goods, this ethical credit scheme delivers real help when most needed and I believe it will make a valuable contribution to breaking the cycle of food poverty in this country.”
Last week, the supermarket revealed a partnership with The Rothesay Foundation to provide pensioners with a voucher worth £30, which can be used to buy food and essentials
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