How vicious loan sharks bite
Anna earns the minimum wage. She has a student loan, an overdraft and credit card debt, which means there's not much money left over once the other bills are paid.
When her father died suddenly, her mum needed urgent help to cover the funeral costs. She went to the only place she could to find the $2000 - her friendly neighbourhood loan shark.
The loan was to be repaid at $70 a week over 18 months. However, every now and then, Anna missed a payment, triggering a $400 admin charge and 55 per cent penalty rate.
Three years down the track, Anna still owed almost $2400.
This scenario comes directly from a paper by the Child Poverty Action Group.
"Without help, she will never escape from this debt," it concludes.
Luckily, there's a happy ending.
Anna ended up getting a small interest-free loan from The Nga Tangata Microfinance Trust, and paid off the debt in two years.
The Kiwibank-funded scheme does good work, helping people out of these sort of hopeless situations and breaking the cycle of debt.
However, it's very small-scale. That's why it's great news that Bank of New Zealand has also thrown its considerable weight behind the cause, offering up $10 million of its own cash to fund a similar scheme last week.
The goal is to stamp fringe lenders out of the market by giving the permanent residents of Struggle Street low-interest or interest-free loans.
Lots of people get shut out of ordinary bank lending because they've blotted their credit score with an unpaid bill.
If emergency strikes and they can't get help from family, they fall into the arms of legal loan sharks, who welcome them with a toothy grin.
The reason this is such a problem is that there's no limit to the interest rates they can charge, and politicians don't have the guts to introduce one.
Lenders of last resort will demand as much as 50 per cent to 500 per cent interest - extortionate by anyone's standards.
At that rate, even borrowing $1000 for a month would cost you a staggering $400.
Microfinance schemes are still in their early stages, and are only available in limited areas.
However, if you're in trouble, it definitely pays to explore all your options before you turn to the fringe lenders.
That means going to talk to a budget adviser or support group in your area about any other assistance available, which might include Work and Income grants, debt consolidation, or a budget overhaul.
The whole concept behind microfinance, which usually applies to small business, is that it generates a sort of "virtuous circle".
Hopefully, other corporates will get involved and play their part, and people freed of debt will be much better equipped to help out their family and their communities.
The only ones who lose out are the loan sharks and nobody's going to be shedding any tears for them.