Iceland is offering 'microloans' to customers who are unable to afford food with between £25 and £75 available for those who need to buy essentials. The trial scheme sees borrowers apply for short-term loans through the Iceland Food Club, operated by charity-owned lender Fair for You.
Families can ask for between £25 to £75, which is repaid in £10 weekly instalments, and there is a maximum credit allowance of £100 at any one time. Once approved, the loan is transferred to a Food Club card, which can be used to pay for shopping online or in-store at Iceland supermarkets and The Food Warehouse.
Iceland managing director Richard Walker says a £75 load repaid over eight weeks would see the borrower pay interest of £2.89. If someone borrowed the minimum of £25, this would attract 40p interest, he said. The interest rate payable is 45%, equivalent to 55.6% APR, according to Fair for You.
