109 inquiries about loan scheme

THE level of inquiries for an initiative fighting predatory lending with no or lowinterest loans has exceeded expectations.

Early last month, Good Shepherd New Zealand announced the programme for Otago and some of South Canterbury.

It uses Presbyterian Support Otago as a vehicle to help people access nointerest or lowinterest loans, which are provided by BNZ.

Since then, Presbyterian Support’s Family Works arm has had 109 inquiries about the scheme.

Community finance worker Melanie Aicken said that had exceeded the agency’s expectations.

It was early days, but through

October, it had approved 11 loans.

‘‘In terms of who we’ve been able to reach so far, having that word of mouth has helped to get traction quickly.’’

Many of the applicants were ‘‘quite a different group of people’’ to whom it would usually see.

‘‘We’re getting more salaried people and pensioners as well. Often with the pensioner, they’re quite asset rich, but not cash rich.’’

It showed even people with jobs could be struggling.

‘‘When something goes wrong, whether car or home, people often don’t have funds to draw on when they need to.’’

Many who inquired asked for help with debt consolidation, which the loans could not be used for.

‘‘But part of that is about having financial conversations with people.’’

The loans were developed partly to help tackle loan sharks and predatory lenders.

Mobile traders targeting poorer parts of Dunedin sold essentials at inflated prices and offered credit.

‘‘It’s really, really good to have an option like ours, because not everyone qualifies for bank lending.’’

The scheme offers the no interest loan scheme (Nils) for between $300 and $1000, which has a maximum 12month term.

Applicants can also choose the StepUP scheme for loans between $1000 and $5000, which has a fixed interest rate of 6.99% per annum, for between three months and three years.