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National Australia Bank has begun piloting a new Microenterprise Loan to back people who have an aspiration to get ahead in business but can't access mainstream finance.
NAB CEO Australia, Ahmed Fahour, said the loans would be provided on a not-for-profit basis and formed part of NAB's commitment to provide small, safe and affordable finance to people on low incomes.
"The NAB Microenterprise Loan is an unsecured, low interest business loan of between $500 and $20,000 for people who are financially disadvantaged and have few or no avenues to access affordable credit," he said.
"Eligible applicants will not only get access to financial assistance but, through the help of government partnerships, will also be given business skills training and advice during their first year of operation."
"These loans are a hand-up not a hand-out. Applicants need to develop a business plan and demonstrate their commitment to the training provided so a bit of sweat equity is required."
Mr Fahour said microenterprise loans were used widely overseas to help marginalised people start and sustain new business.
"While loan programs like this have been successful overseas it's a relatively underdeveloped concept in Australia were access to affordable credit is still a stumbling block for people on low incomes."
Federal Minister for Workforce Participation, the Honourable Dr Sharman Stone, said NAB's investment in microenterprise was commendable.
"Australia is a nation of small business. Many new businesses starting up have great prospects but the owners don't have the savings or assets needed to borrow essential capital from lending institutions," she said.
"Major lenders, like NAB, know that low interest unsecured loans are an important response to the needs of one section of our community and I commend their enterprise.
"Through its small business mentoring program know as the New Enterprise Incentive Scheme, the Australian Government is now training people to understand this product and access microfinance."
The three ways to apply for a NAB Microenterprise Loan announced today are:
1. Local Enterprise Hubs - supporting new or existing local microenterprises with the support of state governments. These will run through existing state-based business enterprise centres in the following locations:
Victoria: Greater Dandenong
New South Wales: Western Sydney, Hunter
South Australia: Southern Adelaide
2. Young Entrepreneurs - supporting people aged 18 - 29 years wishing to start a new enterprise. This program will be delivered in conjunction with Enterprise Network of Young Australia (ENYA).
3. Enterprise Plus - supporting existing microenterprise that have been involved with the Federal Government's New Enterprise Incentive Scheme (NEIS).
The Microenterprise Loan program will initially be run as a 12 month pilot after which NAB will look to expand the program with other partners. Full information can be found at www.nab.com.au/microenterpriseloans
Microenterprise Loans form one part of NAB's $30 million commitment to microfinance, which includes ongoing investment in No Interest Loans Schemes and growth of its StepUP loan program both in partnership with Good Shepherd.
For further information, please contact:
Rebekah Miles
National Australia Bank
T: (03) 8634 0692
M: 0400 541 139
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