24 April 2012
National Australia Bank (NAB) today welcomed the federal government’s discussion paper on payday lending, which aims to provide Australians excluded from mainstream financial services with a fairer alternative to payday lending.
NAB General Manager, Corporate and Community Responsibility, Paula Benson, said she was pleased that the government is putting payday lending at the top of its priority list and recognising the impact that it is having on the economy and community.
“We welcome the government’s discussion paper on payday lending which seeks to reduce the need for pay day lenders by improving access to fairer alternative financial services, as well as improving assistance provided to those stuck in the payday lending debt cycle.
“Pay-day lending can be a vicious cycle for those excluded from mainstream finance. These people often borrow money to cover short-term commitments like rent and utility bills, and due to the excessive interest rate attached to the loan, often have to borrow more money to pay back the initial loan.
"NAB is proudly leading the industry in addressing financial exclusion. Our aim is to ensure all Australians have access to fair and affordable financial products and services,” said Ms Benson.
NAB works in partnership with Good Shepherd Microfinance to finance the No Interest Loans Scheme (NILS®) – interest free loans of approximately $1,200 for essential household item, such as fridges and washing machines – offered via hundreds of community organisations nationally.
Since 2003, NAB has invested more than $130 million in the following microfinance programs, which it offers in partnership with community partners and government:
- StepUP loans – unsecured personal loans up to $3,000 with 3.99 per cent p.a. fixed interest for approved purposes such as essential household items, second hand car, car repairs and medical purposes; and
- AddsUP Savings Program – matched savings up to $500; and
- 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
Sharna Rhys-Jones M: +61 (0) 417 028 942