35 years of the No Interest Loan Scheme (NILS)

In 1981, petrol was 35 cents a litre, you could post a letter for 22 cents and Sydney’s median house price was $78,000!

Thankfully, one product has been immune to the pressures of inflation. In 1981, the No Interest Loan Scheme (NILS) began offering small loans to people on low incomes. Thirty-five years and 181,000 clients later, there are still no fees, no interest and no charges.

NILS was developed in response to reports from youth workers in Collingwood that a lack of access to money and credit was proving to be a major hurdle for people trying to improve their circumstances. They weren’t able to furnish a home or pay for the simple things that would allow them to live with dignity.

The idea was conceived by Gavin Podbury, a staff member at Good Shepherd Youth and Family Services. He approached Sister Anne Dalton with the idea, who in turn, presented the idea to the Sisters of Good Shepherd.

The Good Shepherd Sisters Leadership Team - Sr Noelene White, Sr Monica Walsh, Sr Anne Dalton
The Good Shepherd Sisters’ Leadership Team: Sr Noelene White, Sr Monica Walsh, Sr Anne Dalton

The Good Shepherd Sisters, famous for their audacity, decided to back the idea. Against the advice of their lawyers and accountants, who warned they’d never see their money again, they made $20,000 available in no interest loans.

To the surprise of many, but not the Sisters, nearly every cent was repaid, allowing the money to be lent back into the community. The program grew and soon Good Shepherd “was the coordinator of the largest microfinance network in Australia.”[1]

The program had a tangible effect on people’s lives. ‘Pitch your tents on distant shores’, the history of the Good Shepherd Sisters in Australia, highlights the impact the program had on a single mother who’d been washing her family’s clothes by hand since their washing machine had broken down. She’d applied for several loans elsewhere “but was seen as a high-risk candidate who would be unable to meet repayments”. She described how her no interest loan impacted her life:

“When the washing machine was delivered, me, my son and daughter were in the lounge room jumping up and down … Because I’m happier, both my children are happier. When I’m stressed and upset, they’re uptight … when I’m happy, they are happy. And that’s all thanks to this … such a small detail, and yet it makes such a big difference to someone’s life.”[2]

Now 35 years old, NILS is supported by the Australian Government and NAB, and loans are available from 263 community organisations from 636 locations across Australia. Over $20 million in loans is being provided annually.

A newspaper advert from the Stop small problems getting big microfinance campaign
In 2014, through a partnership with NAB and Clemenger BBDO, Good Shepherd Microfinance was able to run the ‘Stop small problems getting big campaign’ in mainstream media to raise awareness of NILS.

The program’s growth led to the creation of Australia’s largest microfinance organisation – Good Shepherd Microfinance.

A lot has changed since 1981. We’ve had eight Prime Ministers, the internet became a thing, CDs came and went, and Sydney’s house prices have become a national talking point.

The NILS has grown, but remains fundamentally the same – it treats people with respect, enables them to live with dignity, and levies no fees, no interest and no charges.

Happy birthday NILS!

A birthday cake with the No Interest Loan Scheme (NILS) logo and candles on it

[1] Kovesi, Catherine, Pitch your tents on distant shores: A history of the Sisters of Good Shepherd in Australia, Aotearoa/New Zealand and Tahiti, p. 374

[2] Ibid, pp. 374-375

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