Low interest & interest free loans save New Zealanders $500k

Social Development Minister Anne Tolley says the Community Finance Initiative is helping low income Kiwis to improve their financial capability and independence while saving thousands in interest.

“This initiative has provided $1 million of zero fee, interest free or low-interest lending in the last year, saving low income individuals and families over $500,000 if they had borrowed from alternative lenders,” says Mrs Tolley.

“To date, nearly 400 people have received a loan since the Community Finance Initiative was piloted.

“Over 1,700 in-depth financial capability sessions have also taken place between borrowers and dedicated financial mentors, helping people to develop long term financial capability and independence.

“An interim evaluation of the Community Finance Initiative found that participants reported improvements in their financial management. Over time those skills will help people to become more independent and successful.

“Just over half of the loans were used to purchase a vehicle or for vehicle maintenance, helping people maintain their employment or find new employment opportunities, as well as maintain their independence.

“The interim evaluation also found a significant increase in the employment rate for those who participated in a financial session, irrespective of whether they received a loan or not.

“This initiative is now being scaled up, with the CFI Partners (BNZ and Good Shepherd New Zealand) working on finding alternative providers to deliver the service, alongside existing community providers, the Salvation Army and Aviva.”