A strategy to help people avoid using pay-day lenders and
loan sharks has been announced by the BNZ in conjunction with
the Government, Good Shepherd NZ and the Salvation Army.
The bank has committed $10 million to a community finance
initiative offering interest-free and low-interest loans to
people banks do not normally lend to.
The programme will start with a one-year pilot scheme.
BNZ director of strategy and business performance, Michelle
van Gaalen, said the sheme was aimed to help people become
self-sufficient and would build on the bank's range of
financial literacy initiatives.
''BNZ wants to help all New Zealanders be good with money,
including those who currently don't have access to
conventional sources of credit.
''Traditionally, banks haven't provided loans to customers
with minimal income so those people have been using the only
other option they feel they have - borrowing at extortionate
The BNZ would draw on the experience of its parent, the
National Australia Bank, which had been running a successful
community finance programme for more than 10 years, she said.
For some, community finance was seen as a way to help people
break out of poverty.
For others, it was a way to promote economic development,
employment and growth.
For the BNZ, it was the right thing to do, Ms van Gaalen
Social Development Minister Paula Bennett said the
announcement honoured commitments made in last year's Budget
to boost practical support for people on low incomes.
''We're already helping beneficiaries and people on low
incomes to buy whiteware and more children are being fed in
"Now, we're focused on increasing the wellbeing of families
by assisting them to avoid unscrupulous lenders and their
crippling interest rates,'' she said.
Budget 2014 is on May 15.