British supermarket Iceland is offering loans to help shoppers struggling to buy groceries

Britain’s Prince Charles is ushered into the workshop by Richard Walker Managing Director and Sir Malcolm Walker, Founder and Executive Chairman of Iceland Foods Ltd on July 5, 2021 in Deeside, Wales, UK on July 5, 2021. Christopher Furlong/Pool via REUTERS

LONDON, Aug 17 (Reuters) – British supermarket group Iceland Foods will allow shoppers to take out small, interest-free loans to buy groceries, it said on Wednesday in a program targeting poor households coping with rising living costs have fight.

Iceland will work with nonprofit lender Fair For You to offer loans ranging from £25 to £100 ($30 to $121) to financially vulnerable customers via preloaded cards that can make repayments once a week.

The program comes as UK inflation hovers around 40-year highs after soaring in recent months, squeezing household budgets and contributing to a wave of industrial unrest.

Official figures on Wednesday showed that UK inflation topped 10% in July, mainly due to rising energy prices. Forecasts are that prices will rise by more than 13% in October, causing a long recession. Continue reading

“More than ever, in this unrelenting cost-of-living crisis, people are struggling to buy much-needed daily essentials, and businesses and governments are having to rethink to find workable solutions,” said Richard Walker, Managing Director of Iceland Foods, in a Explanation.

The loan program would offer flexible repayment programs and borrowers would not be harassed by debt collectors, Walker said on Sky News earlier on Wednesday. He also said loans would not be sold to third parties.

Iceland said its program follows a successful pilot with 5,000 customers. Nearly three-quarters of them said they are now less likely to default on bills, and 92% reduced their use of food banks that provide emergency food to families in need.

Loans will be capped at six windows a year to coincide with school holidays, when spending typically surges, Iceland said.

($1 = 0.8254 pounds)

Reporting by Sachin Ravikumar; Adaptation by William James

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