Iceland supermarket has launched an interest-free loan scheme to help shoppers avoid food poverty. The interest-free loans, organised in partnership with Fair for You, of amounts between £25 - £100, are available on a pre-loaded card, and can be used to purchase everyday items, enabling financially vulnerable customers to cover grocery bills or "smooth out gaps" in their income.
After using the card, customers will repay the loans set at £10 a week, with the option to overpay if convenient. Additionally, customers can set the day when the repayments happen.
The loans are available one loan at a time over six windows of the year to coincide with the school holidays. The retailer says through limiting the loans it helps customers smooth out incomes, while not needing to rely on them all year-round.
The Iceland Food Club scheme has been organised as part of the retailer's ‘Doing it right: right now’ response to the cost of living crisis and has already been shortlisted for a Global Good Award.
Findings from the trial showed that the initiative reduced the use of food banks by 92% and a reduction of more than 80% in the number of customers using loan sharks. Additionally, 71% of customers said they were less likely to fall back on rent, council tac, or other bills.
Managing Director of Iceland Foods, 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."
Simon Dukes, CEO, Fair for You, added: "Nobody should have to go hungry in order to feed their kids, or be forced into making impossible decisions between putting food on the table or having hot water. Our mission at Fair for You is to provide affordable credit to those who need it, to ensure they are not ripped off by exploitative lenders.
"We're proud to be working with Iceland to operate the Iceland Food Club. Now that it has launched nationally, it gives plenty more families the opportunity to get the groceries they want, improve their diet and enjoy family meals together, while also getting a better handle on their finances."
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