Safer vehicle finance options and savings safety net trial agreed at industry forum

Measures to trial a safety savings net for all New Zealanders and a plan that could create safe and affordable vehicle options including social leasing and community ride-sharing have been announced at the conclusion of the Financial Inclusion Industry Forum today. Banks and NGOs also agreed to improve access to simpler, safer credit for vulnerable people.

Minister of Commerce and Consumer Affairs Kris Faafoi confirmed the initiatives to be actioned at the conclusion of the day, thanking business, the community sector and the government agencies for their involvement.

“For the first time in New Zealand we’ve had business leaders, community agencies and the government sector in the room working together this way to improve people’s financial outcomes,” Mr Faafoi said. “I look at what has been achieved in one day and I am more convinced than ever that together we can stop the misery resulting from people having become trapped in bad financial situations.

“As a Government we have legislation underway to stop predatory lending and here today the community and financial sector is working on another piece of the puzzle that we need to solve - improving financial inclusion, both boosting people’s financial capability and creating safe and appropriate alternatives.”

The needs of vulnerable consumers around banking, saving, credit, and buying cars were topics discussed in workshop groups charged with finding alternatives. Some of the projects agreed for action were:

  • Inclusive Banking Products and Services – led by the Banking Ombudsman

Banks identified ways they could improve access to simpler, safer financing for vulnerable people to meet their needs and agreed to collaborate widely with government and non-government.

  • Emergency Savings – led by Commission for Financial Capability:

There was a genuine desire to build a savings safety net for all New Zealanders and strong alignment across all the sectors to do this.

  • Microfinance – led by Good Shepherd New Zealand:

The organisations recognised they have common objectives and a complimentary set of skills, resource and experience. The group identified the need to take a more co-ordinated and systematic approach to both scale existing initiatives and fill gaps in the current offering.

  • Cars & Car Finance – led by the Financial Services Federation:

Came up with three key concepts for vulnerable consumers to access safe reliable and affordable vehicles involving an affordable ownership model, a social leasing model and a community ride-sharing model and will make sure these ideas have a life outside of the forum.

Mr Faafoi said that the collaborations agreed were a step-change towards making New Zealand a country where financial inclusion is a way of life.

“On behalf of consumers and this Government which intends to make New Zealand an inclusive society where everyone can thrive, I sincerely want to thank all the organisations here today. It is particularly pleasing to be here with my colleague Carmel Sepuloni, who is also working to improve New Zealanders financial capability through a number of MSD-led initiatives.”

Minister for Social Development Carmel Sepuloni said:

“Crippling levels of debt block vulnerable families from home ownership, increase stress levels and cause family problems. I welcome the financial services sector's initiative, to work collaboratively with NGOs and Government to offer safer lending and banking options.”

Fleur Howard, Chief Executive of Good Shepherd New Zealand, offered Good Shepherd’s assistance with following up on progress of the ideas and collaborations initiated. Good Shepherd New Zealand is also working on a longer term project to support organisations to develop more inclusive products and services and improve financial inclusion.

Ministers Faafoi and Sepuloni have asked for a report back on progress of the initiatives, by October.