Debt-crippled people turn up at Vai Harris's door every day.
The Pacific Island Budgeting Service Trust manager has more than 900 clients who collectively owe more than $18 million.
Harris says a new Government-backed finance lending initiative Community Finance, announced on Wednesday, is a "good scheme".
But it's not new and it doesn't combat the root of the problem, she said.
Social Development Minister Paula Bennett launched the pilot scheme in Manukau and said loan sharks are "a big problem in South Auckland and West Auckland".
But Harris said her Mangere-based budgeting service already helps provide interest-free loans of up to $2500. Almost all of them are fully paid within one or two years.
"The day-to-day necessities people are borrowing for are the washing machine, the fridge, the car and things like a pram for the kids."
The trouble starts when a client becomes "desperate" and takes out a loan with a 30-40 per cent interest rate.
"So many people come here with the same problem," Harris said.
"A client recently bought a car which he needed to start working. His income was $418 a week and the finance company made him pay $400 a week.
"There are too many people who are easy targets on low income. They [loan sharks] are not sensible lenders and they don't care … all they want is their money. We need to get rid of high interest loans."
Bennett says the scheme will give people a more sustainable lending alternative. And she has a warning for loan sharks - "we are coming after you".
Mangere Labour MP Su'a William Sio supports the scheme but said it fails to address the reasons people get into debt in the first place.
"The problem I see is that the Government seems to think it's OK to borrow to put food on the table or that it's OK to borrow for rent or for the doctor or to pay for the power bill. It underpins the growing inequality many families are now experiencing in New Zealand and it's not addressing incomes.
"The real answer is in lifting incomes."
Salvation Army social policy director Campbell Roberts said many lenders are "pushing the boundaries of legality" and his organisation is looking at "serious input" for more legislative change.
Federation of Family Budgeting Services adviser Tracey Green also welcomes the new scheme, saying it gives people "other avenues that they are not trapped into". Many clients often don't know what they are signing up to and "loan sharks" often "omit certain information", she said.
"In an ideal world we'd be out of a job…but people often find themselves in a downward spiral."
- Manukau Courier
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