British supermarket group Iceland Foods has allowed customers to take out small interest-free loans to help pay for groceries.
The scheme targeted at poor households struggling with rising living costs is thanks to a partnership with the non-profit lender Fair For You. The loans are available on preloaded cards with a value between 25 and 100 pounds ($48 and $191). Financially vulnerable customers are able to make repayments once a week.
The program underwent extensive trials that helped over 5,000 families in 18 months. Of the participants, 92 percent reduced their use of foodbanks, 80 percent stopped borrowing from loan sharks, and 71 percent said they were less likely to fall behind on rent.
"We are also deliberately making the loans available only in school holiday windows to ensure that they are used for smoothing out incomes rather than inducing permanent dependence," said Richard Walker, Iceland Foods Managing Director.
Iceland Foods have also noted that the loans will not be sold to third parties.
"In these exceptionally tough times, I hope that other businesses and indeed governments will also look to innovative ways all of us can work together with charities, community organisations and the whole public sector to lend a helping hand to those most in need."
