NAB welcomes commonwealth efforts

Friday, 26 August, 2011

National Australia Bank today welcomed the Commonwealth Government's announcement that it would reform the payday lending market, to help Australians who are financially excluded from mainstream financial services and struggle to live on their current incomes.

NAB Personal Banking Group Executive Lisa Gray said there was an urgent need for reform to ensure prohibitive interest rates from some fringe lenders did not lead to a debt spiral.

"People turn to fringe lenders when they can't afford to live on their current incomes and can't access financial services from banks," Ms Gray said.

"This sort of borrowing may provide cash for an urgent need, but the prohibitive interest rates and crippling fees can result in a debt spiral that is almost impossible to escape.

"NAB is leading the industry in addressing financial exclusion. Since 2003, NAB has invested more than $130 million in microfinance programs to support the financially excluded."

This May, Ms Gray released the inaugural NAB/CSI Financial Exclusion Indicator, which found one in seven Australian adults are either fully or severely excluded from accessing basic financial services, such as a transaction account or a small personal loan, leaving them susceptible to predatory lending practices.

The study found that 2.65 million Australian adults would have difficulty raising $3000 in an emergency because of a lack of access to basic banking services.

As well as investing more than $130 million in microfinance programs, NAB works in partnership with Good Shepherd to finance:

  • No Interest Loans Scheme (NILS®) – interest free loans of approximately $1,000 for essential household item, such as fridges and washing machines – offered via hundreds of community organisations nationally;
  • StepUP loans – unsecured personal loans up to $3,000 with 3.99 per cent p.a. fixed interest for approved purposed such as essential household items, second hand car, car repairs and medical purposes; and
  • AddsUP Saving Program – matched savings up to $500.

NAB also offers Microenterprise loans – unsecured credit of $500 to $20,000 at 5.99% p.a. to help start up or support an existing small business for people who would not normally be able to access business finance.

Ms Gray said NAB was also committed to providing Fair Value to customers – a strategy which is shaking up the banking industry by offering a fair exchange of value for the services that banks provide.

Media contact:

Dianne Sarantakos
Personal Banking Corporate Affairs
Ph: 0416 577 937
dianne.sarantakos@nab.com.au