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Press Release
28 April 2015
No Interest Loans now available for low-income families
BNZ, Good Shepherd NZ, Ministry of Social Development and The Salvation Army
have launched the second stage of their successful Community Finance initiative –
the No Interest Loan Scheme (NILS).
The Community Finance initiative was launched in August 2014, and aims to help
people that banks don’t normally lend to, and who are often forced to borrow at highinterest rates from loan sharks and pay-day lenders.
The new no interest loans of up to $1000 for a maximum of 12 months, are now
available to people on low incomes through The Salvation Army’s centres in
Manukau and Waitakere.
The life-changing loans can be used to purchase essential services or household
items that directly improve the lives of borrowers.
Joanne Forgie, a Community Finance worker at The Salvation Army’s Manukau
Community Centre is excited about the impact that the loans are already having.
“One of our new no interest loans offers a way for families to pay for essential family
items such as a computer for the kids, or unexpected events such as the car
breaking down.
“Being able to have the car fixed means the person can still get to work, get the kids
to school, or get to a doctor’s appointment.
“The repayments on a $1000 loan can be as little as $20 a week, and with no
interest or other fees charged, the loans are paid off even faster,” she says.
The initiative began with one loan product; low-interest rate ‘StepUP’ loans of up to
$5000 for larger assets. Already, 44 loans have been approved, and Community
Finance workers are working to help other applicants get their financial affairs into
better shape so they can become eligible.
BNZ’s head of community finance, Frances Ronowicz is delighted with the progress
of the pilot so far, and excited about what the next phase will bring.
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On average, a StepUP loan saves each customer more than $2000 in interest over
the life of the loan, compared to if they had borrowed the same amount through
alternative lenders.1
“If the average family grocery bill is $200 per week2, that’s two and a half months’
worth of groceries.
“While it’s still early days for the pilot, it’s been wonderful to be able to offer more
help to families, and provide another way for people to borrow on fair terms and
make their money go further.
“One of the Community Finance clients used her low-interest loan to get a car,
making it easier to get to work, which gave her some financial security that she didn’t
have before,” she says.
Good Shepherd NZ’s Matt Halsey is excited about Good Shepherd’s pivotal role in
the Community Finance initiative, managing the roll-out of the loan schemes in New
Zealand.
“All of the organisations involved have learned a lot in the first six months, and we
have gained valuable new insights into New Zealand client needs.
“With the launch of NILS, in addition to the low-interest StepUP loans, we’re
expecting that the numbers of families that we’re able to help will grow substantially,
and we’ll learn more from the pilot.
“Community Finance has huge potential to make a significant difference to more of
the people who need it most,” he says.
People interested in applying for a no interest loan should visit www.nils.org.nz, and
for a low interest loan, visit www.stepuploan.org.nz
Ends
Notes
 BNZ has committed $10m of capital to the Community Finance scheme over
5 years
 Good Shepherd NZ provides the Community Finance framework, drawing on
over 30 years of experience in the Australian market
 The Ministry of Social Development contributes to NGO operating costs, but
does not provide lending capital or guarantees
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Estimated interest is based on a rate of 30% over an average loan term of 32.4 months. Estimated fees are
based on a $250 establishment fee and a $10 per month administration fee.
2
Household Economic Survey: Year ended June 2013. Statistics New Zealand. www.stats.govt.nz
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The Salvation Army is responsible for issuing NILS loans to clients from loan
funds provided by BNZ, and liaising between StepUP loan applicants and
BNZ
The Salvation Army and BNZ will work with borrowers to monitor repayments
over the life of the loan, and provide ongoing support to those borrowers
Borrowers must be eligible for a Community Services Card and have stable
accommodation; the primary consideration is the willingness and ability to
repay the loan.
For further information please contact:
Grace Honney, external relations consultant, BNZ
T. 09 924 8591 M. 021 794 935 E. [email protected]
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