Govt deal offers cheap loans

JOHN ANTHONY AND STACEY KIRK
Last updated 10:41 05/05/2014

Relevant offers

Politics

Stacey Kirk: An expected steamroll - Mt Albert win gives Jacinda Ardern near unstoppable momentum School budgets have increased so why are so many principals struggling to make ends meet? Pike River mum: What we wanted was simple then, and it is simple now Jonathan Milne: Is it time to take the keys from Police Commissioner Mike Bush? Tracy Watkins: Andrew Little's morning after headache in Mt Albert Labour's Jacinda Ardern registers massive win in Mt Albert by-election Live: Jacinda Ardern will be MP for Mt Albert after by-election win ACT policy to reduce prisoner sentences a deft political move Westland District Council assets manager Vivek Goel under investigation ACT to reward prisoners with reduced sentences for learning to read in prison

A Government initiative will offer interest-free and low-interest loans to low-income borrowers banks don't normally lend to.

BNZ announced today it would commit $10 million to a community finance initiative in partnership with the Government, Good Shepherd NZ and The Salvation Army.

BNZ spokesperson Michelle van Gaalen said the programme, to start with a one-year pilot, was designed to help people become self-sufficient and get away from using payday lenders and loan sharks.

"BNZ wants to help all New Zealanders be good with money, including those who currently don't have access to conventional sources of credit," van Gaalen said.

"Traditionally banks haven't provided loans to customers with minimal income, so those people have been using the only other option they feel they have - borrowing at extortionate rates."

BNZ will draw on the experience of its parent National Australia Bank which has been running a successful community finance programme for more than 10 years.

The development of the pilot is in its early stages but is intended to launch over the coming months initially in areas where it is most needed.

The initial pilot will target people rather than small businesses.

Social Development Minister Paula Bennett said too many people on low incomes were vulnerable in their credit options, and tempted by easy finance.

"The initiative will see sustainable loans available for some people that might not otherwise be able to service a loan with high interest rates and hidden fees," she said.

The announcement honoured commitments made in last year's Budget to boost practical support for people on low incomes.

Bennett said it was the latest in a string of initiatives by the Government to help people access everyday necessities.

"We're already helping beneficiaries and people on low incomes buy whiteware, and more children are being fed in schools," she said.

"Now we're focused on increasing the wellbeing of families by assisting them to avoid unscrupulous lenders and their crippling interest rates."

Ad Feedback

- Fairfax Media

Comments

Special offers
Opinion poll

Should the speed limit be raised to 110kmh on some roads?

Yes

No

Vote Result

Related story: 110kmh limit moves closer

Featured Promotions

Sponsored Content