Salvation Army pilot no-interest loan scheme arrives in Napier
Hawke's Bay has been selected to trial a new pilot loan scheme to help support people living on low incomes.
The no-interest loans (NILS) and low interest loans (StepUP) are administered by The Salvation Army as an alternative for people who may otherwise turn to loan sharks or high interest options to borrow money.
Ellen-Marie Carpenter is the community finance caseworker managing the project from the Salvation Army's Napier office.
She said that behind the scheme was a pool of community money which could be recycled to support people to build assets.
NILS loans are interest free and for an amount up to $1000 paid back over 12 months.
StepUP loans are from $1000 to $5000 with an interest rate of 6.99 per cent per annum, paid back over three years.
Ten centres in New Zealand offer the StepUP scheme and 19 offer the NILS scheme, however the Napier Salvation Army will offer both and service the wider Hawke's Bay region.
The scheme was launched in December and will run as a three year trial, once the pilot is complete.
Carpenter said the loans were designed to help people build up assets, such as pay for a second hand car which would enable them to travel for work.
It could also be used to fund funerals, household items like white ware, car repairs, computers, house rental bonds, educations costs and medical or dental costs.
Neither can be used to pay off fines, holidays, Christmas expenses or consolidate other debts.
To qualify applicants must be eligible for a community services card, be in stable accommodation and able to attend a face-to-face interview.
Carpenter said a poor credit rating might not prevent a loan.
The initiative is a joint project backed by BNZ and Kiwibank, which have provided the capital, Good Sheppard, which accredits the programme and the Government, which funds operational costs.