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Contrary to some media reports, National Australia Bank has no plans to introduce a no interest mortgage product.
However, along with representatives from other key groups who face financial exclusion, NAB and Good Shepherd Youth & Family Service are working with members of the Muslim community to explore how the No Interest Loan Scheme (NILS) could be extended to the Muslim community.
The No Interest Loan Scheme offers small loans (around $1000) to Australians living on low incomes to buy essential household goods such as washing machines and fridges. This is a not for profit microfinance program developed and managed by Good Shepherd Youth & Family Service, that has been supported by NAB for the last six years and is delivered by 280 community groups across Australia.
It is a reality that people on low incomes have few resources or access to safe credit to buy goods that many take for granted. This extends to parts of the Muslim population who may be eligible for a NILS loan but are excluded to participate in the program due to Shariah law.
The intention of this new development is to explore the possibility to support community organisations who are well placed to offer Shariah-compliant NILS loans in a small number of targeted locations to people who meet the eligibility criteria of not being able to access emergency money to buy household goods.
Again, this is not a commercial product for a specific group, but an extension of an established not-for-profit program for people on low incomes who have no viable credit alternative.
To date, NAB has committed $15million in loan capital to the No Interest Loan Scheme.
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