Iceland Foods is bringing back and extending its Iceland Food Club loans scheme, throughout 2025.
The pioneering ‘microloans’ scheme, which runs in partnership with Fair For You, will return this Christmas, with Iceland also confirming it will offer the programme during the school holidays in 2025.
Iceland customers can borrow up to £100 interest-free, on a preloaded card that can be used to buy groceries at Iceland or Food Warehouse stores. Repayments are set at £10 a week, though shoppers are free to overpay if they want to.
New shoppers are able to apply via Fair For You’s website at any time, while existing customers will be able to top up their card from 16 December.
It is the third time Iceland has extended the ’ethical loans’ scheme since it launched in January 2022. Originally the loans, which were offered to an initial 5,000 customers, had a small interest rate equivalent to 55.6% APR.
However, Iceland started paying the interest on behalf of shoppers when the scheme was rolled out nationwide in August 2022, essentially making the loans interest-free for customers.
In September 2023, Iceland secured an additional £2m investment from not-for-profit finance company Fair4All Finance to fund the ongoing programme.
“For many families, Christmas is shaping up to be one of the hardest in recent years,” said Iceland executive chairman Richard Walker.
“While other businesses have been very vocal in feeling sorry for themselves of late, Iceland decided that we need to roll up our sleeves and get on with the job of supporting our customers. The launch of the next phase of Food Club will help families afford a proper Christmas, giving them peace of mind and helping fight the scourge of predatory loan sharks and unregulated money lenders.”
Iceland announced the extension, alongside the publication of a new report from the Centre For Responsible Banking & Finance, which analysed the impact of the programme up to October 2023.
Some 27, 380 Iceland customers borrowed through the scheme during that time, saving the equivalent of £2m collectively by avoiding other high interest forms of credit, like loan sharks or pay day loans. Nearly a fifth of participants – 18% – said they were no longer falling behind on rent and bills while they had access to the loans.
Overall, 77% said they had reduced their reliance on food banks while using the scheme.
“Responsible and affordable lending changes lives, and this partnership with Iceland is proof of that,” said Simon Dukes, Fair For You CEO.
“By expanding the Food Club this Christmas, we’re making sure families don’t have to choose between heating and eating this winter”.
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