You can get an interest-free loan of up to £2,000 in a new scheme

A government-backed program that provides interest-free loans to financially vulnerable people will be expanded to reach up to 20,000 people. The interest-free loan scheme (Nils), which is backed by the Treasury but run by credit unions and other lending organisations, has been successfully piloted in Manchester and will be rolled out from September to other areas from the United Kingdom.

It aims to provide emergency loans to those who would otherwise be turned down due to their inability to pay the interest. “We fund items ranging from household essentials and school uniforms to laptops to access education and training, and tools and equipment to help people get back to work,” Nils says on his site. website.

The pilot scheme will be extended from existing locations in Herefordshire, Shropshire and Worcestershire from September to other parts of the country for a period of two years, with a decision to be made after that time on whether it should be extended further.

Customers are only allowed to have one loan with the program, which they can have between six and 18 months, although the average term is 12 months. Borrowers can access between £100 and £2,000, with the average amount borrowed being £500.

The pilot is being funded with £3.8m committed by the Treasury, £1.2m from JPMorgan Chase and up to £1m in loan capital from each of the devolved administrations, matched in England by Fair4AllFinance. 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 situations”.

Last month, Treasury Economic Secretary John Glen expressed hope that a large-scale program could eventually be rolled out.

He told the Association of UK Credit Unions that Nils “is a fundamental and 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 bring this proof-of-concept pilot to a larger pilot so that we can now validate it.”

About Ellie Cohn

Check Also

Milton bride-to-be defrauded through online loan scheme | public safety

MILTON, Ga. –– A Milton woman notified police on July 7 that she had been …