Iceland Foods has issued an ‘apology’ to loan sharks after the use of its credit scheme has led to an 80 percent reduction in the number of customers resorting to illegal borrowing.
The Iceland Food Club, a credit scheme which offers interest-free micro-loans through Fair for You, is designed to help households handle their finances amid the rising cost of living.
Richard Walker, Iceland’s executive chairman, has taken to social media to mark the fact that illegal lenders are not benefiting from the award-winning scheme.
In a satirical video posted on his X (Twitter) account, the supermarket boss said: “Sorry loan sharks. Sorry if the Food Club has taken £7million out of your pockets. Sorry if that means that your Christmas is less merry.”
Behind the tongue-in-cheek apology is that the Iceland Food Club has reportedly loaned £7.2million to 28,000 customers since its inception in 2022. An estimated 52,000 children are in families likely to have benefitted from access to ethical credit.
The scheme has also particularly helped women, who make up the 80 percent majority of recipients.
Mr Walker said: “There is a serious point behind this film – micro-credit works. And it can be vital at Christmas to protect vulnerable consumers from loan sharking.
“Food retailers are on the front line with our customers in the cost of living crisis, and we should take care as a sector to help them in difficult times. That’s why I’d appreciate to see more supermarkets offering no-cost microcredit to people who are struggling.
“Government and the Financial Conduct Authority also need to commit more resources to encouraging alternative, safe and affordable forms of credit, that can make a real difference to people’s lives. Iceland is doing its bit: ministers and regulators need to do the same.”
In an independent evaluation of the ethical credit scheme, it emerged that 80 percent fewer customers resorted to borrowing money from illegal lenders.
As an “ethical” lender, Fair for You runs affordability checks on all Iceland Food Club applications to ensure that customers can afford repayments.
Customers can top up their Food Club microcredit card only during school holiday periods to ensure they are using it to confront peaks in expenses and not year-round.
Simon Dukes, CEO of Fair for You, a not-for-profit lender which operates Iceland Food Club said: “Iceland has gone above and beyond to work with Fair for You to make the Food Club interest-free for their customers.
“We’re delighted that other retailers are interested in following Iceland’s direct in finding innovative ways to help people afford household essentials with access to affordable and responsible credit.”
More information about the terms, eligibility, and how to apply for Iceland Food Club can be found here.
