A government-backed scheme is granting high-risk consumers interest-free loans from a few small UK commercial lenders during the cost of living crisis.
The British government will transfer 45 million pounds ($57.18 million) from its Dormant Assets Scheme to London-based organization Fair4All Finance, which will distribute some of the cash to lenders, over a two-year pilot.
The government said 76 million pounds recovered via the initiative, which redirects money from forgotten accounts to good causes, would help individuals battling with rising prices in March.
Social Credit, a partnership between commercial startup lender Plend and two nonprofits, has been providing interest-free loans, according to Reuters.
South Manchester Credit Union and organization Fair For You also participated in the experiment. When asked to name cooperating lenders, Fair4All declined to answer.
Millions cannot get loans due to the failure or withdrawal of payday lenders like Provident and Quickquid.
A 2022 survey by PwC and credit broker TotallyMoney found that 20 million Britons—one in three—cannot get high-street credit due to a low credit score or slight bad credit history.