NAB launches affordable loans program in Tasmania

Friday 20 February 2009

The Tasmanian operations of StepUP, a unique low-interest loan program designed and managed by NAB and Good Shepherd Youth and Family Service; was launched today by Senator Nick Sherry, Minister for Superannuation and Corporate Law.

Tasmania is the fifth state to embrace this multi-award-winning loans program designed for people on low incomes who are struggling to secure credit for much-needed household goods or services.

StepUp loans are a fixed-rate, low interest, unsecured personal loan for amounts between $800 and $3000. A feature of the program is an application and repayment process that includes face-to-face financial mentoring.

Financially disadvantaged Tasmanians seeking a small personal loan for necessary household goods can access the program via the NILS Network of Tasmania in Hobart, Burnie and Launceston.

The launch coincides with NAB’s announcement to almost halve the StepUP interest rate to 3.99%* which is fixed for the term of the loan (effective 23 February 2009).

"StepUp provides financially disadvantaged people with a safe and affordable credit alternative to the often predatory and expensive credit options such as pawn brokers or payday lenders," said Michael Yore, Executive Director, Good Shepherd Youth and Family Service.

"We are thrilled to be taking this program to Tasmania – it has made a difference to so many people's lives and today’s launch is also a celebration of our 1200th loan, a terrific milestone,” he added.

NAB and Good Shepherd Youth and Family Service link the success of this program to the support provided by NAB-funded micro-credit community workers who mentor loan applicants throughout the loan process and repayment period. This assists potential customers to understand whether they are eligible for a loan, and provides them with ongoing mentoring for the duration of the loan.

“The impact of the StepUP program cannot be underestimated – since its launch in 2004, micro-credit workers have had over 6,000 financial conversations about budgeting and how to access appropriate financial products and services," commented Richard Peters, Head of NAB’s Community Finance & Development team.

"StepUP meets a very real community need and its expansion across five states in five years has provided thousands of low-income Australians with positive banking experiences as well as access to fair and affordable credit", added Mr Peters.

The StepUP program helps low-income consumers:

  • Develop confidence and self esteem
  • Access life’s essentials and improve their quality of life
  • Reduce their costs and develop skills to better financial skills (eg. minimising expenses such as bank fees and late fees)
  • Connect with a loans worker

Loans are primarily taken out for car repairs, second hand cars, solar panels, water tanks, white goods, furniture, house maintenance and repairs, medical / dental, vocational education costs, storage costs (one off), airfares (refugee family reunion).

For the last three years the program has won Money Magazine’s Best of the Best - Socially Responsible Consumer Product Award and plans are underway to extend the program to Queensland in 2009. "StepUP is a true exercise in working partnerships, not only between NAB and Good Shepherd Youth and Family Service but also the many community groups we liaise with, such as the NILS network of Tasmania supported by the Salvation Army, who deliver the program in areas where it is needed most", added Mr Peters.

More information about StepUp can be found at www.nab.com.au/microfinance

(*new interest rate effective 23/02/09)

Media contacts:

Felicity Glennie-Holmes Media Manager, Group Corporate Affairs National Australia Bank T: (03) 8641 3627 M: 0412 673 038

Richard Peters Head of Community Finance & Development National Australia Bank T: (02) 9237 9827 M: 0438 582 919