Speech - Community Finance five year celebrationSocial Development
It was on this day 5 years ago that a Community Finance pilot at two Auckland sites kicked off an innovative partnership between the Government, businesses and social sector.
I congratulate BNZ, Good Shepherd New Zealand along with The Salvation Army, Vaka Tautua, AVIVA and Presbyterian Support Otago on their achievement - five successful years of Community Finance no-interest and low-interest lending.
I support the vision that you all share and your commitment to helping our communities. I want to thank you for utilising your financial and business skills in order to help create this lending network.
I want to acknowledge Frances Ronowitcz, head of BNZ Community Finance, Angie Mentiz, the CEO of BNZ, Diana Crossan, Chair of Good Shepard New Zealand and everyone who has been a part of this collaboration.
Community Finance aims to help people in financial hardship to borrow safely. It provides affordable credit to individuals and whānau on low/medium incomes.
This Community Finance partnership came out of a recommendation from the Expert Advisory Group on Solutions to Child Poverty. The work was then led by the Ministry of Social Development in conjunction with some greater partners.
As a Government we value these partnerships between Govt agencies, NGOs and businesses and what they can offer to our communities.
We are committed to genuine change to improve the wellbeing of New Zealanders and reduce hardship. Practical and in-demand support like this partnership is a mechanism to help achieve this, while fighting against the predatory lenders that prey on people, families, whanau and communities.
As the Minister for Social Development, I want to support people to achieve their aspirations. From my experience talking to people who are in the welfare system, to Work and Income staff and to social service providers, there are often temporary barriers that prevent people from reaching their goals or that impact on their wellbeing.
Things like having a reliable car that can make employment, doctors’ offices, childcare or family and friends easier to get to, or a laptop and text books in order to participate in a training course.
A small loan can have a big impact on quality of life. But we know that safe and affordable ‘mainstream’ credit is often inaccessible due to unaffordability and high levels of existing debt.
This leaves space for predatory lenders to take advantage of families impacted by hardship or in urgent need of cash flow, leading to often unmanageable cycles of debt.
In situations like these, a safe affordable loan could make all the difference. Community Finance works is able to provide this solution.
In addition to these community initiatives, the Government has been working on new measures to stop families falling into hardship caused by predatory lending. This includes new consumer credit legislation which is expected to come into force next year.
I want to acknowledge the work of Minister Fa'afoi on this legislation, as well as the business unit at MBIE. I know some of you in the room will have submitted on this bill during select committee and I thank you for offering your insights and being a part of this change.
We have also been working on a framework to enable joined up responses from government, the financial services industry and the community sector to the ongoing issue of debt in our communities.
The Ministry of Social Development has been working closely with the Ministry of Business, Innovation and Employment and Te Puni Kōkiri on a joint programme of work that builds an environment where more New Zealanders can achieve their goals and aspirations, free from problem debt.
We want people and whanau to have clear pathways to accessing financial and non-financial tools and services that are affordable and appropriate to their needs.
I want to finish by acknowledging the additional funding contributed by BNZ to expand the Community Finance partnership. I applaud your ambitions to continue to grow the network around the country and respond to the needs of low-income New Zealanders.
I look forward to seeing how partnerships like this can continue to help New Zealanders to achieve their aspirations.