DUBLIN, Ireland–Tens of thousands of families are set to avail of "hassle-free loans" of up to €1,000 as Ireland’s government seeks to break the dependence on moneylenders.
The plan, being spearheaded by the Department of Social Protection, will see loans being approved within an hour with just minor credit checks, according to the Independent, which reported that some 40,000 loans are to be made annually by the country's post offices and credit unions in a major effort to provide an alternative to moneylenders.
The loans are priced at 12% APR, compared to as much as 188% by the private moneylenders, the Independent reported.
A pilot scheme, which could be in place by September, is specifically aimed at low to middle-income earners who may have been refused loans by the banks, according to the publication.
According to its backers, repayments would be “virtually guaranteed” because people would be required to have the money for repayments taken from their social welfare under the existing Household Budget Scheme.
This is a scheme administered by the post offices which involves deductions being taken from social welfare payments to pay for things such as rent bills, the Independent reported.
Government sources say there will be a significant involvement by the Money Advice And Budgeting Service (MABS) and St Vincent de Paul to ensure people don't seek loans they cannot afford.