The Personal Microcredit Scheme is being spearheaded by the Department of Social Protection and will see loans being approved 'within an hour' with just a few checks on people's credit background.
The loans will be rolled out through post offices and credit unions and will carry interest rates of up to 12 percent – compared to up to 188 percent with some private firms.
John-Mark McCafferty from St Vincent de Paul, which is supporting the scheme, is hopeful it will mean fewer people using moneylenders.
“People who are already in low incomes can find themselves paying back sums that they simply don't have the resources for” he said.
“That's where a low-cost loan scheme like this can really come in where people don't have access to mainstream credit that the rest of us take for granted” he added.
