A government scheme offering interest-free loans to those financially vulnerable is set to expand to 20,000 people across the UK as the cost of living crisis continues to worsen.
The No Interest Loan Scheme (Nils) was run in Manchester and some other areas as a trial and will be rolled out across the UK because of its success.
The aim of the policy is to offer loans of up to £2,000 to people who cannot afford normal ones because of the interest rates attached to them.
‘We fund items from household essentials and school uniforms through to laptop computers to access education and training, and tools and equipment to help people back into employment,’ Nils says on its website.
The scheme will be expanded from areas like Manchester, Worcestershire, Shropshire and Herefordshire across the rest of the country for two years.
A decision will be made after two years as to whether the scheme should be expanded further.
Customers are allowed to have one loan with the programme for a minimum of six months and a maximum of 18 months, with the average being 12 months.
Borrowers can access amounts of between £100 and £2,000 with the average amount being £500.
£3.8 million has been committed by the Treasury for the scheme, £1.2 million from JPMorgan Chase and £1 million of lending capital from each of the devolved administrations, matched in England by Fair4All Finance.
Fair4All Finance, which partly runs the scheme, was founded by the Treasury and the Department for Culture Media and Sport three years ago to ‘support the financial wellbeing of people in vulnerable circumstances’.
Economic secretary to the Treasury John Glen last month expressed hope that a full-scale programme might eventually be rolled out.
He told the Association of British Credit Unions that Nils ‘is a fundamental, worthwhile, new initiative, to provide a gateway product for people who at the moment are beyond the lending capacity of some credit unions’.
‘The challenge now will be to take that proof-of-concept pilot to a bigger pilot so that we can now validate it.’
Get in touch with our news team by emailing us at webnews@metro.co.uk.
For more stories like this, check our news page.