Iceland is offering loans to hard-pressed shoppers to help them afford food, the supermarket’s MD Richard Walker has revealed.
The frozen food specialist is offering an “ethical and affordable alternative” to the “ultra-high-interest lenders, or even illegal loan sharks” families facing food insecurity might otherwise resort to, Walker said.
Called Iceland Food Club, and operated by charity-owned lender Fair for You, the scheme offers short-term ‘microloans’ of £25 to £75, repaid in weekly £10 instalments. The interest rate is 45%, equivalent to 55.6% APR, according to Fair for You.
A £75 load repaid over eight weeks would attract interest of £2.89, Walker said in his latest blog. A £25 loan would attract 40p interest.
The maximum allowable credit at any one time is £100.
The loan is transferred to a Food Club card, which can be used to pay for shopping online or in-store, exclusively at Iceland and The Food Warehouse.
According to Walker, Iceland first piloted the initiative in two communities in Yorkshire and North Wales in 2020. It has now rolled out across north west England and South Wales, offering over £1m in loans so far, supported by HM Treasury and philanthropic funders, he said.
His blog is Iceland’s first announcement of the initiative.
“The results, as seen in an early social impact report, are encouraging,” Walker said. “Before we launched the Food Club, 84% of participants went without because they could not afford to buy food, and half were referred to food banks – though even among those who meet the tight eligibility criteria for food banks, there are many who are simply too embarrassed to use them.
“Since joining the Food Club, however, 83% of participants tell us that they no longer need to access food banks, 80% report an improvement in their mental health, 85% say that they are less worried about meeting their monthly expenses, and 75% report that they are feeding their children more healthily.
“These are outstanding improvements, but based on a small number of people over a short time period. A more detailed, independent social impact report will be produced this year, which will tell us more.”
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