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Over $11.5 million lent by payday loan alternative


BaptistCare GM Community Services Rob Ellis with Keira Ellingwood

BaptistCare has approved 16 loans per week to some of Australia’s most financially vulnerable people.

The No Interest Loan Scheme (NILs), a microfinance program aimed at providing small no- and low-interest loans to financially vulnerable people, has this week announced it has surpassed $11.5 million lent in NSW. The loans are designed to help people on lower incomes purchase essential goods and services.

The loans are provided through BaptistCare with the scheme run under Good Shepherd Microfinance in partnership with NAB and the NSW Office of Fair Trading. While BaptistCare has been operating since 1944, the microfinance program was started in 2008.

Borrowers on low incomes or that receive Centrelink payments can visit a loan provider and apply for finance.

Keira Ellingwood, a client coordinator at BaptistCare, covers the Northern Rivers territory which includes Grafton, Tweed Heads, Ballina and Lismore.

“It was quite slow to start off with,” she said, referring to the take-up of NILs in the area. “But in saying that, Grafton is a small town and I know everyone. My mum is really big in the Indigenous community and everyone knows her, so everyone knows me.”

She does say it’s difficult working with people she knows so well.

“Every day there are people that I know that come in. It can be really awkward because you’re talking about deeply personal things – finances. So when they come in and are speaking about these things, I try and be as professional as I can. But I like building relationships with people.”

Ellingwood also says that while the personal nature of the application process can be challenging, it can present opportunities.

“It’s quite a juggling act to be honest. It’s very difficult when I have to say no to people because they really need the loan in most cases, so for me I just try and do the best I can for the client. If I can’t help them, I send them to somebody that I feel could possibly help them. Say if their budget isn’t great, they can come back to me in a few weeks when they’ve saved some money. Or they can go and see a financial counsellor. So I feel like it’s not always a definite no.”

NILs borrowers are those that would normally turn to higher cost short-term loans to cover essentials. One-third of borrowers (32%) receive a Disability Support Pension (DSP) and 21% receive a Single Parenting Payment. Over one-quarter of NILs recipients are Aboriginal and Torres Strait Islander clients.

“There are also multiple issues that surround Indigenous communities,” said Ellingwood. “I think it is very difficult for most people to get a bank loan and that is the biggest thing. Being able to get that safe and affordable loan is what brings them to us. I think it’s just word of mouth that brings people in – that’s how it works in Grafton. We went from doing one loan a month to ten a week.

“They know that they can come to us and it’s safe and affordable at the end of the day.”

The average loan size is $1,390 across NILs and StepUP loans, a low-rate loan provided through the NAB partnership.

The loans need to be for essential purposes. Over the last 10 years, loan funds were used to purchase 693 fridges and 597 washing machines. The most popular category for NILs loans were expenses relating to getting cars back on the road (3,831).

Ellingwood says that cars are one of the main drivers for people taking out a NILs loan.

“So many people needed to get their cars back on the roads and it’s such a massive expense. I had a lot leading up to Christmas that had to pay out $1,000 or $800 just to get their cars back on the road.

“When I first started I was naive,” said Ellingwood. “I would say what difference does a washing machine or a fridge make? But it changes people’s lives.”

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