Iain Duncan Smith
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Iain Duncan Smith announces affordable loans scheme

Work and Pensions Secretary Iain Duncan Smith has announced a new not-for-profit lending scheme, aimed at giving manageable loans to financially excluded people.

A pilot has been set up in the West Midlands called My Home Finance, in the hope of diverting people away from borrowing from loan sharks.

However, the interest being charged is higher than the maximum by law that credit unions can charge.

It will charge 29.9% APR in the pilot scheme, rising to 49.9% APR in April.