UK extends interest-free emergency loans to the needy
Britain’s Treasury-backed interest-free loans (Nils) scheme will now be extended to reach up to 20,000 people, according to a report.
Nils would offer emergency loans to those who would otherwise be turned away because they cannot pay the interest.
Nils’ website says the aim is to “fund items ranging from household essentials and school uniforms to laptops to access education and training, and tools and equipment to help people find a job”.
The report notes that customers will only be allowed one loan with the program, which they can access for six to 18 months. The average duration is one year.
The program is supported by the Treasury but operated by credit unions and other loan companies. It has been successfully tested in Manchester and will now be rolled out to other parts of the country.
The pilot will be expanded from existing locations in Herefordshire, Shropshire and Worcestershire, which happened last September, to other parts of the country for a two-year period.
It looks like a decision is being made at that point on whether to expand it further.
John Glen, Economic Secretary to the Treasury, said last month 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.”
PYMNTS wrote that the current era will allow consumers to accomplish various tasks like ordering food or booking flights faster with digital means.
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And Anil Stocker, co-founder and CEO of MarketFinance in London, said finance is moving in the same direction.
“[They] now expect a similar level of service in their business applications and in their consumer applications,” said Stocker.
Stocker added that the goal was “frictionless funding” and that the company’s systems were set up to allow users to get a decision within a day of applying for a loan.
This comes as there is more demand for faster loan application and approval processes.