People in Tasmania will be among the first in the country to trial a new low cost cash loan with households across the state three times more likely to turn to high-fee credit options (i) to cover emergency costs.
Not-for-profit community organisation, Good Shepherd Microfinance, launched a trial of its new loan program, Speckle, in Hobart today. Speckle provides a low cost finance alternative for people who are employed and need to access emergency cash to pay for items like car repairs, medical bills and household appliances.
Chief Executive Officer, Adam Mooney, said more than 48,000 households in Tasmania used small amount short term loans between 2012 – 2015 (ii).
“We know that many people in Tasmania are frequent users of high-fee credit, particularly those living in Riverside, Rosetta, Berriedale, Spreyton and Geilston Bay areas (iii),” Mr Mooney said.
“Unfortunately, we also know that many people can get into financial stress when they use this type of credit.”
According to data from Digital Finance Analytics, around 22 per cent of Tasmanian households used high-fee credit from 2012 – 2015 compared with seven per cent of households nationally.
“We know that people need access to emergency cash to pay for household expenses like children’s needs, car repairs and other essential items. Speckle offers a low cost alternative for people who can afford to repay a cash loan of between $200-$2,000,” Mr Mooney said.
“Speckle is around half the cost of other short term cash loans because it’s been developed by a community organisation that is focused on improving financial wellbeing. Our fees include a 10 per cent establishment fee and 2 per cent monthly fee compared to the market average of 20 per cent and four per cent.
Mr Mooney said that 2.4 million adults were facing some level of financial stress (iv) but people in Tasmania were doing it toughest with the lowest household median weekly income of anywhere in the country at $1,100 a week (v). “Around 25 per cent of people in Australia lack access to any form of credit which means they are unable to borrow money from a traditional bank or lender (vi),” he said.
Speckle was created by Good Shepherd Microfinance with the support of NAB.
Head of Financial Inclusion at NAB, Elliot Anderson, said through its 15 year partnership with Good Shepherd Microfinance, NAB has enabled many vulnerable people in Australia to improve their situation.
“In partnership with Good Shepherd Microfinance, NAB has supported more than half a million people; but there is more to be done. We’re supporting Speckle because it is a better alternative for people who have limited options and need a small amount of credit to help them bounce back.”
Good Shepherd Microfinance has a range of financial programs that are designed to address gaps in the market – where people, because of their income or financial situation, can’t access appropriate financial products when they need them most.
“We’re focused on customer care including providing clients with information to explore the most appropriate option for their needs – whether this is a Speckle loan, another microfinance program, mainstream finance or financial counselling,” Mr Mooney said.
Speckle loans are issued by Good Shepherd Microfinance. To be eligible for a Speckle loan, applicants must earn a minimum gross income of $30,000 annually which is not inclusive of government benefits. For more information visit speckle.com.au.
TOP TEN TASMANIAN SUBURBS FOR HIGH-FEE CASH LOANS
1. Riverside 2. Rosetta 3. Berriedale 4. Spreyton 5. Geilston Bay 6. Newnham 7. Moonah 8. Warrane 9. Dodges Ferry 10. Youngtown
More information at speckle.com.au and facebook.com/speckleloans
Media contact: Fran Metcalf, Sequel PR – 0417 627 867; Renee Hancock, Good Shepherd Microfinance – 0417 055 299; Kylie Breckenridge, NAB – 0402 746 226
i Deakin Law School legal studies research paper No. 17-05 by Professor Gill North, Nov 2016
ii Deakin Law School legal studies research paper No. 17-05 by Professor Gill North, Nov 2016
iii Data from Digital Finance Analytics (2015) representing an estimate of the absolute number of households in a given postcode who will have likely taken a payday loan in the past 3 years
iv Financial Resilience in Australia 2016. Centre for Social Impact and NAB v Australian Bureau of Statistics. General Social Survey 2015
vi Financial Resilience in Australia 2016. Centre for Social Impact and NAB