Low and no interest loans pushing out payday lenders
Run payday, run. Low and no interest loans giving lenders a run for their money
The Good Money store, a subsidiary of Good Shepherd Microfinance, officially opened its doors in Adelaide on Friday 14 March 2015, and is offering low and no interest loans. If the venture has an effect similar to its Collingwood outlet, payday lenders will soon be leaving the area.
Good Shepherd Microfinance CEO Adam Mooney said there had been a "significant reduction" of payday lenders in operation in Collingwood after Good Money opened its doors.
"We don't ever want to put anyone out of business, we just hope that payday lenders can offer fair, safe and responsible credit at an affordable rate," Shepherd told the ABC.
There is a need for affordable forms of credit, and in many cases, the only form of finance people are eligible for is a payday loan. They may be on Centrelink benefits, unemployed, or have bad credit and are therefore ineligible for a traditional bank loan or credit card.
The introduction of organisations such as Good Shepherd Microfinance, which is receiving most of its funding from National Australia Bank, provides an alternative solution for borrowers.
No interest loans of up to $1,200 are on offer at the Good Money store in Adelaide, and personal loans up to $3,000 are available for a low rate of 5.99% p.a.
The repayment rate of these loans is astounding, with 97% repaid in full.
Good Shepherd Microfinance has several locations throughout Australia where borrowers can access affordable finance. The loans are designed to help borrowers pay for essential household items, medical services or even education expenses. Eligibility depends on the borrower being on a low income or having a healthcare or pension card and having the ability to repay the loan.