The Ministry of Social Development in conjunction with the Bank of New Zealand, Good Shepherd New Zealand and the Salvation Army have launched a one-year community finance pilot today in a bid to help low income families avoid loan sharks and high debt.
Today, a $10 million community finance initiative or small loans for low income families scheme was launched in a bid to combat that problem.
“Most loans outside a bank offer around 15-30% in interest, so this will be a better choice for those wanting to buy the bare necessities,” says Hinemaua Rikirangi of BNZ bank.
The 'StepUp' loans will be made available for low income families with the ability to repay.
Loans will be between $1000 and $5000, with a repayment scheme of 36 months maximum, at an interest rate of 6.99%.
This loan will also be extended to the communities of South Auckland and Waitākere.
According to Hinemaua Rikirangi, “This scheme is a choice because whānau continue to take loans from loan sharks with high interest rates.”
No Interest Loans (NILS) of up to $1000 for a maximum of 18 months will be available from early September.