In a move that serves to further blur the line between commerce and banking in Iceland, local Baugur-owned megastore Hagkaup has advertised that they are offering interest-free loans to patrons that cannot afford their Christmas shopping this year. As for a target market, those already paying off foreign currency loans and the recently unemployed come to mind.
Credit card holders may charge their entire limit at the store, with their first payments (plus a 3% processing fee) due in March of next year. Repaying the cheerful holiday loan from that fun-loving conglomerate may be spread over a six month period, which should be plenty of time for most to earn the cost of Christmas, even in the light of the massive tax and price hikes that are still being imposed on the nation.
Some have expressed surprise that a store operating under the helm of corporate giant Baugur –which is by many accounts at least partially responsible for Iceland’s financial meltdown – is now offering loans to those affected by the crisis.
“Hagkaup is likely trying to increase their sales, as is normal. However, I think that in the light of recent circumstances they should consider whether giving out more loans to people is a good idea,” said Gísli Tryggvason, Consumer Spokesman of Iceland.
An unnamed Hagkaup manager tactfully declined to comment on the motives behind the loans, remarking only that “…we are giving out these loans for people that choose this payment method.” When asked whether loans had proved popular, his answer was that the loan had been used quite a lot in some of the bigger Hagkaup outlets, although he could not answer how many loans had being given out at this point.
The CEO of Hagkaup Gunnar Ingi Sigurðsson could not be reached for comment.
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