The company announced Wednesday that the program is aimed at poor families struggling with the rising cost of living. Iceland Foods, which has more than 900 stores, works with the nonprofit lending company Fair For You. Financially vulnerable customers will be given small loans of 25 to 100 pounds (30 to 119) via pre-installed cards, which can be repaid once a week.
“More than ever, during this ongoing cost-of-living crisis, people are struggling to purchase much-needed daily necessities,” said Richard Walker, managing director of Food in Iceland. “It takes fresh thinking from businesses and government to find workable solutions.”
Inflation at its highest level in 40 years
The unusual program comes at a time when inflation in the UK is at its highest level in 40 years, with the cost of goods and services in July increasing by an average of 10.1 per cent over the previous year, according to the Office for National Statistics in London. The most powerful driver of prices is energy. But Britons also have to dig into their pockets when it comes to shopping for everyday needs: retail prices are up 12.3 percent, the highest since 1981. Economists predict that the inflation rate could rise to more than 13 percent in the autumn, leading into a long stagnation.
Collection agencies did not participate
According to Iceland, the credit system should include flexible repayment programs. In Sky News, Walker promised that borrowers should not be harassed by collection agencies. The loans will not be resold to third parties. According to Iceland, the new program is based on a successful pilot project with 5,000 clients. Nearly three-quarters of them said it reduced their bill arrears. Loans must be limited to six time periods per year.
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