Announced this week, Fair4All Finance has partnered with Toynbee Hall and Fair By Design to deliver a No Interest Loan Scheme (NILS) pilot, the first of its scale across the UK, with £3.8m in funding from HM Treasury and up to £1m of lending capital from each devolved administration, matched in England by Fair4All Finance.
The loans will provide a vital financial cushion for people unable to access or afford existing forms of credit, but who can afford to repay small sums, by offering a way to spread essential or emergency costs.
The pilot will work with credit unions, Community Development Finance Institutions (CDFIs) and other regulated lenders, who will be able to apply to administer the loans through a formal procurement process starting in November.
The NILS pilot aims to test the benefits to customers, society and the economy and show whether a permanent nationwide NILS can be delivered in a sustainable way.
John Glen, Economic Secretary to the Treasury said: “I now want to see lenders and organisations committed to financial inclusion supporting this innovative new scheme, which could make a vital difference for people right across the UK who can’t access or afford existing forms of credit.’
Commenting on the pilot scheme, ABCUL Chief Executive, Robert Kelly said: “ABCUL welcomes the opportunity to engage in this NILS pilot and to determine the role that credit unions may play in its successful implementation – the need to support those financially vulnerable with a broader range of products and services has never been more evident.
“Credit unions have a tremendous track record in building financial resilience across communities all over the country and we will approach the build and delivery of this scheme with collaboration and co-operation at the forefront of our minds.”
Full details on the pilot are available on Fair4 All Finance’ website here.#News