BNZ and Community Finance partners Good Shepherd New Zealand and The Salvation Army are delighted with today’s announcement in the New Zealand Budget of $4.2 million of operating funding over four years for their Community Finance initiative.
Launched in 2014, Community Finance has approved more than 200 low-interest and no-interest loans to financially vulnerable New Zealanders who may not meet bank criteria, and as a result can be forced to take out loans with other providers at very high interest rates and fees.
BNZ estimates that the $500,000 of lending to date has saved Community Finance customers more than $280,000 when compared with borrowing the same amount through alternative lenders.
The additional funding will allow more community finance loan workers to be trained and the programme to be expanded beyond the initial trial regions of West and South Auckland.
Anthony Healy, BNZ’s Chief Executive Officer says “We are thrilled that the Government has decided to further invest in Community Finance and we applaud Ministers Bill English and Anne Tolley for their commitment to this initiative.”
“BNZ has made available $60 million in capital to help a group of New Zealanders break the cycle of using unscrupulous lenders, who often charge crippling fees and penalty upon penalty. Community Finance offers these customers a fair, safe and affordable line of credit.”
“Community Finance delivers more than just low and no interest loans. We know there are broader societal benefits. People learn budgeting skills. Being able to buy a new fridge can mean a healthier diet. A safe car can enable access to the job interviews and better employment prospects. Today’s announcement will mean we can reach more people and get a better understanding of those broader benefits, and how the programme can help contribute to a higher achieving New Zealand.”
Fleur Howard, Chief Executive of Good Shepherd New Zealand, says Good Shepherd Australia New Zealand has led the development of community microfinance and financial inclusion programmes in Australia for over 30 years, impacting over 400,000 Australians on low incomes.
“We are looking forward to working with our partners to explore new and innovative ways to support our clients and continue to improve and expand Community Finance’s operations across New Zealand.”
Major Pam Waugh Territorial Social Service Secretary, Salvation Army says there have been many successful outcomes in family wellbeing through a reduction in financial stress and families achieving financial capability.
Community Finance currently operates from The Salvation Army Community Ministries’ sites in Manukau and Henderson.