Changing lives, one small loan at a time
17 Dec 2019
3 MINI once
heard a story about a woman named Sharon*. Thoughtful and capable, she had
everything going for her. Except her teeth. Sharon’s unpleasant dental issues
affected her health, and her confidence – so much so, she fell into a spiral of
depression. In her 20s and employed as a personal assistant, Sharon’s mental
health struggles forced her to give up work.
With no other means to pay for dental treatment, Sharon finally struck up the
courage to book an interview with a community loan worker. Enveloped by a
feeling of hopelessness, she failed to make her initial appointments, but
desperation eventually won out.
Soon, a loan was arranged, and Sharon received the treatment she needed for her
teeth. Her confidence restored, Sharon was soon back in a job and back on her
feet.
It’s stories like these that make my role as Head of Community Finance at BNZ
really rewarding. As an organisation, we’ve joined with not-for-profit Good
Shepherd to offer low and no-interest personal loans to people just like
Sharon. We deliver this service through community loan workers who work for organisations
such as Aviva and The Salvation Army, and I’m proud to say what we do makes a
real difference to people’s lives.
Those we help don’t meet our main bank credit criteria and are sometimes
referred by our customer-facing staff. Although they’re usually good with
money, when an unexpected cost comes along they can really struggle. And when
they’re desperate and need finance, these customers have traditionally had few options
other than to turn to predatory lenders.
Their situation certainly isn’t helped by our housing market. We’re seeing
people with half their income going towards rent. This means they have little
left over for other essentials – like a car.
That’s where we come in. In fact, close to 70% of the low and
no-interest loans we fund are for second-hand cars and car repairs.
But it’s not just about paying for the purchase or upkeep of a physical item.
It’s what the loan lets our borrowers do. With a car, you can do a proper
supermarket shop. It can help you work longer shifts and be more employable,
which can lead to financial benefits.
We’ve also recently partnered with Habitat for Humanity to provide an interest
and fee-free line of credit so they can expand their home repair programme.
They take a holistic approach with families in need and organise contractors
and volunteers to help, as well as loans for house repairs.
If you look around BNZ, you’ll see people involved in our Community Finance
programme at lots of different levels. There’s a core team of five, based at
head office, with people in Communications, Marketing, Legal, and Collections working
on this every day. We also have an advisory board of 10 who help guide and grow
the programme. And there are lots of advocates across the business who, off
their own back, have offered up their skills in some shape or form.
As a result of our collective efforts, I’m proud to say we’ve lent over $5
million to more than 2,000 families – families we estimate would have paid an
extra $2.8 million combined in interest and fees had they borrowed from
predatory lenders.
Why do we do it? Because it’s the right thing to do. For me personally, I saw
an opportunity to make a difference in people’s lives. I don’t like those who
prey on the vulnerable – the loan sharks – and we’re doing what we can to get
rid of them in our communities. To provide a second-hand car for the family or
a washing machine to a busy parent who would otherwise have to trek to the
laundromat is simply life-changing.
*Sharon’s real name and the story has been changed to protect the identity of the community loan user.
Lending criteria and terms apply. Loans are for approved purposes only (no cash loans).
Any views expressed in this article are the personal views of Frances Ronowicz and do not necessarily represent the views of BNZ, or its related entities.
