Microfinance
Why will some low-income Australian families pay 6 times more for this fridge than they should?
Many low-income Australian families can’t afford to buy a fridge - instead, they rent one.
Renting a secondhand 420L Westinghouse refridgerator costs
approximately $905 per annum whereas buying the same refridgerator new costs approximately $990.
This means that over 5 years, the low-income family will pay $3,535 more for a refridgerator than a family who can afford to buy one. NAB Microfinance helps low-income families buy basic household items such as refridgerators and avoid paying more than they should.
Figures are indicative only and compare costs provided by a leading whitegoods retailer with a leading whitegoods rental service.
Why Australia needs Microfinance
While Australia weathered the global financial crisis better than most, this country still has a large group of people who experience financial disadvantage including more than 2 million people living in poverty.
To many in Australia, it's an invisible problem. However, individuals and families on low incomes struggle every day just to get by. For these people, accessing safe, affordable finance is often a major difficulty, resulting in a lack of basic household goods and services or access to business capital. Individuals and families on low incomes need someone to invest trust in them and their future.
Michelle from Good Shepherd explains how NAB's Microfinance program is helping to make a difference to the lives of thousands of financially disadvantaged Australians.
NAB's Microfinance solution
Since 2003, NAB has developed innovative microfinance solutions to help low income Australians access fair and affordable financial services in partnership with local community agencies and government.
Through a positive financial experience, participants in NAB's microfinance loans and savings programs receive support and respect that can help them change their day-to -day reality in a practical and dignified way.
NAB believes it has a responsibility to help create strong and sustainable communities and has invested more than $130 million in the following programs:
No Interest Loans Scheme - NILS ®
Developed 30 years ago by Good Shepherd Youth & Family Service, NILS is circular credit program whereby low income Australians are able to access loans of up to $1,000 from their local community agencies. These loans are largely for the purchase of essential house hold goods such as fridges and washing machines.
StepUP Loans
Together with Good Shepherd Youth & Family Service, we designed the StepUP Loan. These safe, affordable low interest loans of between $800 and $3,000 are for individuals or families to buy personal items.
AddsUP Savings Program
ddsUP is a matched savings plan that focuses on helping people living on low incomes develop financial independence through savings. AddsUP is open to people who have successfully repaid their NILS or StepUP loan and once $300 is saved, NAB will “once-off” match every dollar up to $500.
Microenterprise Loans
The Microenterprise Loan program supports individuals who wish to start up or grow a business but who have limited access to capital. These unsecured loans of between $500 and $20,000 are provided on a not-for-profit basis and loan recipients get access to business skills training and advice during the first year of their business.
