BNZ’s Head of Community Finance, Frances Ronowicz, reflects on three years of providing affordable loans in a successful partnership with the government and not-for-profit organisations.
Elsie’s got $80 more a week in her family budget after receiving a Community Finance loan for home appliances. Les has independence in his retirement now that he could buy a reliable car with his loan funds. Aayla can get her kids to school and herself to university with the car she bought with her loan.
Our Community Finance initiative is three years old now and these New Zealanders are among hundreds who have benefitted from an affordable low or no interest loan, where the alternative could have led to an unsustainable debt situation.
Three years also marks the end of the loan terms for some of our first StepUP loan customers. It’s great to see so many loans repaid and we now even have some customers who are on their second loan with us.
It’s a team effort
Elsie is a widow and works casually so she can look after her family of six. Les is a pensioner. Other customers have a problematic credit history.
These financially vulnerable people don’t meet the traditional bank lending criteria and their alternatives are lenders who may charge high interest rates and fees.
Community Finance is a unique collaboration with BNZ, Good Shepherd, the Ministry of Social Development and our community partners like The Salvation Army and Aviva, working together to provide fair and affordable low interest loans for people like Elsie, Les and Aayla.
The pilot programme in Auckland was extended with additional funding from the Government in the 2016 Budget so now more New Zealanders can access low interest loans.
In tandem with our efforts, the Commerce Commission is undertaking excellent work to determine whether lenders are operating within the law.
The smiles from our clients are acknowledgement enough – but we’re also proud of the industry recognition the Community Finance programme has achieved.
In 2015 BNZ won the Institutional Banking Innovation award for the Community Finance initiative at the Institute of Finance Professionals New Zealand (INFINZ) Awards, which recognises the creation of a better or more effective product, process, service, technology or idea that is readily available to markets, governments and society.
Community Finance was also a finalist in the 2015 Sustainable Business Network community innovation award.
One of the rewarding things about the scheme is the fact it is not just about providing loans. It’s also about helping people become more financially capable. Our customers tell us their family budgets have improved as part of their conversations with our loan workers.
It’s a great accomplishment for the scheme and resounds with BNZ’s mission to help people be good with money so they can do great things with it.
To many more years
Over the three years Community Finance has been operational, our loan workers have had more than 2,000 financial conversations with applicants. That’s really something worth celebrating.
As I look ahead to our fourth year, I’m excited that the funding provided by the Ministry of Social Development enables the programme to be extended to further sites.
We’re looking forward to developing partnerships with new community providers, while supporting our loan workers as they continue to deliver marvellous work in their communities.