2 weeks Ago By [email protected] (Ruby Flanagan)
Iceland has extended its interest-free "microloans" scheme for Christmas in a bid to help struggling customers. The Food Club Loans Scheme - which is run in collaboration with online lending company Fair For You - allows shoppers to borrow up to £100 interest-free on a preloaded card which can be spent at Iceland or Food Warehouse stores. Standard repayments then sit at £10 a week, with users allowed to pay back more if they want.
The supermarket has also confirmed that it will be offering the programme during the school holidays in 2025. New shoppers are able to apply through Fair For You’s website at any time, while existing customers can top up their card from Monday, December 16. This is the third time Iceland has extended the scheme since it launched in January 2022.
Originally, the loans - which were trialled with 5,000 Iceland customers - had a small interest rate equivalent to 55.6% APR. However, this was essentially scrapped when they were rolled out nationwide in August 2022, as the supermarket began paying the interest on behalf of shoppers.
In September 2023, Iceland secured an additional £2million investment from Fair4All Finance to continue to run the scheme to offer customers an “ethical and affordable alternative” to the “ultra-high-interest lenders, or even illegal loan sharks”. A report published by the Centre For Responsible Banking & Finance, alongside the announcement revealed that 27,380 Iceland customers borrowed through the scheme since it started. These customers collectively saved an equivalent of £2million by avoiding other high interest forms of credit, like loan sharks or payday loans.
According to the report, 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. Iceland executive chairman Richard Walker told the Grocer Magazine: “For many families, Christmas is shaping up to be one of the hardest in recent years.
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.” Simon Dukes, Fair For You CEO added: "Responsible and affordable lending changes lives, and this partnership with Iceland is proof of that.
By expanding the Food Club this Christmas, we’re making sure families don’t have to choose between heating and eating this winter”..
