NAB launches microfinance programs in Far North Queensland

Tuesday 8 September 2009

The Queensland operations of the award-winning Step UP (low interest loans) and Adds UP (matched-savings) programs were launched today at Shelter Housing Action Cairns (SHAC) by The Honourable Peter Lawlor, Minister for Tourism and Fair Trading, Queensland.

SHAC, which has provided access to the No Interest Loan Scheme (NILS®) since 2005, is offering these not for profit microfinance programs together with National Australia Bank (NAB) and Good Shepherd Youth and Family Services.

"Every day we see the connection between financial exclusion and homelessness, so we are delighted that this community partnership will extend the microfinance options for people living on low-incomes in Far North Queensland and can help to break the cycle," said Ms Wynn Hopkins, Chair Management Committee for SHAC.

"Our success with NILS has reinforced that there is a high demand for these programs, and demonstrates that with the support of our Microfinance Worker, borrowing and saving are achievable goals for people experiencing disadvantage.

"Now we can offer a range of safe and affordable savings and loan programs to meet the different needs of the communities we help," added Ms Hopkins

Today's launch is a milestone for NAB and Good Shepherd Youth & Family Services, who have been working together to expand the award-winning StepUP and AddsUP to Queensland.

It's fantastic that these programs are now accessible in Queensland. SHAC is the first community group to offer all three microfinance programs and it is an ideal community partner to deliver them," said Michelle Sainsbery National Microfinance Manager Good Shepherd Youth & Family Service.

NAB and Good Shepherd Youth & Family Service link the success of their microfinance relationship to the support provided by local micro-credit community workers who mentor applicants of the loan and savings plan throughout the process.

"The impact of these programs cannot be underestimated. These products meet a very real community need and their expansion across Australia has provided thousands of low-income Australians with positive banking experiences as well as access to fair and affordable credit," said Richard Peters, Head of NAB's Community Finance & Development team.

The not-for-profit microfinance programs accessible through SHAC include:

  • StepUp (new) - fixed-rate, low interest, unsecured personal loan for amounts between $800 and $3000.
  • AddsUP (new) - a matched-savings plan to promote financial independence and open to people who have successfully repaid their NILS or Step UP loan. Once $300 is saved, NAB will "one-off" match every dollar up to $500.
  • NILS® (existing) - no-interest loans between $500 -$1000 for individuals living on low incomes, to buy essential household items.

More information about NAB's microfinance commitment can be found at www.nab.com.au/microfinance.

Media - for further information contact:

Felicity Glennie-Holmes Media Manager National Australia Bank T: 03 8634 2910 M: 0412 673 038 Richard Peters Head of Community Finance and Development National Australia Bank T: 02 9237 9827 M: 0438 582 919

About SHAC - Shelter Housing Action Cairns was established in November 1987, after a need was clearly identified during the International Year of Shelter for the Homeless Housing Conference held in Cairns. Since that time, family homelessness has remained SHAC's core 'support' business and the organisation has continued to consolidate and grow a property portfolio in addition to crisis accommodation properties. In 2005 SHAC also undertook to adopt the Good Shepherd Youth & Family Service No Interest Loans Scheme (NILS), funded by NAB. Shelter Housing Action Cairns (SHAC) is the first location in Queensland to offer the StepUP and AddsUp programs. SHAC also receives support from the Queensland Office of Fair Trading to fund its Microfinance Worker.

About NILS® - NILS was developed 28 years ago by Good Shepherd Youth & Family Service, a community based organisation who work to raise awareness of the experience of people on low incomes, inequitable social structures, financial exclusion, social and economic participation. Based on the concept of circular community credit, this program provides low income consumers with access to funds to purchase essential household items. These loans are offered to members of the community through an educative process that is based on trust, respect and dignity. By lending these funds at no interest, NILS falls outside the regulatory requirements. Good Shepherd franchises this concept and makes it available to community agencies. There are over 260 accredited NILS programs across the country writing on average approximately 4,500 loans per annum totalling $4 million in lending in 2007. In 2008, Queensland Office of Fair Trading partnered with NAB and Good Shepherd Youth & Family Service to extend the reach of NILS across the state. SHAC took on a leadership position in Far North Queensland and houses one the two government funded Community Development Workers. These roles are responsible for embedding NILS programs in the local community. NAB has committed $15 million in loan capital to NILS programs to further their development.

About Step UP Low interest Loans - Step UP was initially launched in Melbourne in March 2004 and is a joint initiative between NAB and Good Shepherd Youth & Family Service. The program focuses on providing low income Australians with a positive banking experiences as well as access to fair and affordable credit. To date over 10,000 financial conversations about budgeting and accessing appropriate financial products and services have been held resulting in over 1600 loans. Step UP loans are offered from $800 up to $3000 at a rate of 3.99%p.a . This program is delivered across all states through Good Shepherd Youth and Family Service and additional thirteen community agencies. NAB funds the wages of all the community workers involved. Loans are primarily taken out for: car repairs, second hand cars, solar panels, water tanks 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.

About Adds UP matched Savings Plan - The newest microfinance initiative developed by NAB and Good Shepherd Youth & Family Service was only launched in May 2009. SHAC is the second community agency to sign up to this program. An extension of NAB's microfinance program, AddsUp is the next step for people who are living on low incomes and keen to develop financial skills around saving. Under AddsUp, people who have already accessed and repaid either a no interest loan (NILS®) or low interest loan (StepUP) available through NAB and Good Shepherd, can begin to contribute to a matched savings plan. NAB provides an incentive for people to save $300 in their AddsUp Savings Plan, which is provided via NAB's Concession Card Account, a account for concession card holders that has no monthly account service fee or NAB transaction fees. Once this goal is reached, the account holder becomes eligible to have their savings matched, dollar for dollar, by NAB. NAB will match AddsUp Savings Plans once a year, to the total annual value of $500 per account. For example, a person who saves $400 in their account will receive an additional $400 from NAB, taking their savings balance to $800.