Hundreds of families to get hassle-free loans
Published 12/08/2015 | 02:30
Some 900 'hassle-free loans' of up to €1,000 are to be handed out in the coming weeks as part of the Government's bid to break the dependence on moneylenders.
A pilot-scheme being spearheaded by the Department of Social Protection will see so-called micro-loans being handed out within minutes to low-income families.
Some 27 credit unions have expressed an interest in administering the loans as part of the pilot scheme, which is expected to be rolled out in the autumn.
It's anticipated that a nationwide micro-loan programme will be in place next year.
As part of the pilot scheme, each credit union will administer up to 30 loans which will be aimed initially at those on social welfare.
Interest rates of up to 12pc will be applied on the loans - compared with rates of up to 188pc charged by private firms.
It is envisaged that repayments would be virtually guaranteed because people would be required to have the money taken from their social welfare under the existing Household Budget Scheme.
The Money and Budgeting Advice Service (Mabs) will be involved, to ensure people do not seek loans they cannot afford.
Junior minister Kevin Humphreys said the scheme could prove pivotal in ending the dependency on private moneylenders.
"I am very satisfied with the enthusiasm the initiative has attracted and we are hoping to learn a great deal from the pilot scheme before a national programme is put in place," Mr Humphreys said.
"This is all about helping people who are left with no option but to go to moneylenders and pay exorbitant interest rates," the Dublin Bay South TD added.