Government to issue small loans to compete with moneylenders

The Government is to issue loans of up to €1,000 to get people to turn away from moneylenders.

A range of agencies like St Vincent dePaul and the Money Advice and Budgeting Service are set to work on the scheme, which it's hoped could begin in September.

The Personal Microcredit Scheme is being spearheaded by the Department of Social Protection.

It will see loans being approved "within an hour" with just a few checks on people's credit background.

The money will be rolled out through post offices and credit unions around the country.

Interest rates of up to 12% will be applied to the loans, which compares to rates of up to 188% on loans from some private firms.

A source told the Irish Independent that the aim is to take moneylenders "out of the loop", and provide "hassle-free loans" to low and middle-income families.

The Society of St Vincent de Paul is among those supporting the new scheme, saying the use of high-interest moneylenders can result in people attempting to pay back loans they simply cannot afford.