New BNZ bank-backed scheme aims to rid Otago of loan sharks

New BNZ-backed loan scheme to provide affordable finance.
New BNZ bank-backed loan scheme to help people in need. Photo credit: Getty

Otago residents on low-incomes can now access community-based, no-interest and low-interest loans to help them manage unexpected costs.

Good Shepherd NZ and Bank of New Zealand (BNZ) have partnered up to provide fair and affordable finance to people in need. 

Supported by the Ministry of Social Development, the 'No Interest Loan Scheme' and 'Step Up Loan' are designed for people who don't meet standard loan criteria.

Fleur Howard, chief executive of Good Shepherd NZ said that the programme is designed to help prevent financial hardship and "insurmountable" debt.

"A lot of families find it hard just to meet basic food, housing, power, transport and healthcare needs," Howard said.

"To cover [unexpected] costs, such as a car to get to work or a new washing machine, [for some] people who don't main mainstream lenders' criteria, their only option is the loan shark end of the finance market.

"As a result, they can become burdened with unmanageable debt."

Frances Ronowicz, head of community finance at BNZ said that predatory lending has got to stop.

"We want to rid our communities of loan sharks who prey on our most vulnerable by offering a much better alternative - no and low interest loans.  [This is supported by] a conversation that sets Kiwis up to manage their money and improve their quality of life."

Good Shepherd NZ's goal is to make the programme available to more families on limited incomes throughout the country. 

"When families come to us, we can provide affordable loans and support to help improve their financial situation, enabling them to stay out of serious financial trouble," Howard said.

Made possible by new operational funding from BNZ, together with existing funding from the Ministry of Social Development, the programme is part of a wider Government initiative to provide fair credit to those unable to meet mainstream financial criteria. 

Loan eligibility criteria includes people who hold a current Community Services Card and/or who are single and earning less than $40,000 gross per year.   Additionally, people must be in stable accommodation and able to afford the repayments, having exhausted their options through Work and Income. 

The Good Shepherd community finance programme offers no-interest and low-interest loans of up to $1,000 and $5,000.  Support can be accessed through Presbyterian Support in Otago, Aviva and Vaka Tautua, and Salvation Army at 34 locations throughout New Zealand. 

Newshub.

 

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