Supermarket Iceland to launch interest-free loans scheme to help shoppers

SUPERMARKET Iceland is set to launch an interest-free customer loans scheme to help shoppers during the cost of living crisis.

The frozen foods retailer will provide small loans initially with a £100 interest-free credit.

Iceland will provide small loans to shopper initially with a £100 interest-free credit

Iceland will provide small loans to shopper initially with a £100 interest-free creditCredit: Getty

Shoppers who join Iceland’s Food Club can load up to £25 to £75 onto their cards.

Iceland said that it had been working with ethical lender Fair to You and testing different options for the past two year on a pilot with more than 5,000 customers.

It said that its trial micro loans of between £25 and £100 resulted in 92 percent of customers who had been turning to food banks, stopping or reducing their reliance.

Another 71 per cent said they were less likely to fall behind on rent, council bills and afford other essentials.

The credit – designed to smooth out budgets between pay days – also meant 80 percent fewer shoppers turned to loan sharks.

Boss Richard Walker said: “Fresh thinking is required by business and government to find solutions.”

The interest-free scheme has been supported by Fair For You who said it helps ensure shoppers “are not ripped off by exploitative lenders”.