The South Australian Government has announced its support for Good Money, a ‘one-stop shop’ to provide services to South Australians that are financially excluded.
Backed by the South Australian Government, Good Shepherd Microfinance and the National Australia Bank (NAB), Good Money will offer a holistic customer-focused approach to meeting the financial service needs of people on low income, providing a viable alternative to predatory pay day lenders and rent-to-buy schemes.
Customers will be provided with support and resources that help inform financial decisions through one-on-one assistance with budgeting and access to a suite of safe and fair services. On offer are no and low interest loans, a matched saving program, energy inclusion products for households concerned with high energy costs, and safe credit through the Debt Deduct program, a ‘circuit breaker’ to address the immediate need for debt relief.
South Australian Premier, Jay Weatherill, said “Sometimes all the bills come at once and the temptation is to resort to loans from loan sharks."
"With Good Shepherd Microfinance and NAB, we will set up a Good Money store so that people can manage their bills without suffering crippling interest rates from unscrupulous payday lenders.
"This is about helping people manage their household budgets before they need crisis support." Mr Weatherill said.
Chair of Good Shepherd Microfinance, Christine Nixon APM, said Good Money is a leading example of community, government, and the corporate sectors working in partnership, with each bringing strengths.
“There are many South Australians struggling to make ends meet such as working class families who don’t traditionally use welfare services. They may need to purchase or repair cars, buy or replace furniture or whitegoods, fund educational expenses or consolidate debts. The financial services provided by Good Money make people feel valued, included and in control of their own finances and lives."
Corinne Proske, Head of Community Finance and Development at NAB, said “When vulnerable people experience financial hardship, they can resort to high cost fringe lenders or let their debt accumulate to a point where they feel helpless. Good Money’s aim is to make available safe financial services for those in need and to give them the confidence to define their own economic wellbeing.”
“We want all Australians to have a healthy relationship with money. Giving people the confidence and means to manage their finances will help build a more robust economy and prosperous communities.”
Based on a model already successfully trialled in Victoria, Good Money has proven that it can break the cycle of people turning to high-interest payday lenders when they need financial assistance. Around 86 per cent of customers have never accessed community finance, but 34 per cent have used payday lending services. Significantly, more than half of these customers have said they do not intend to use a payday lender again.
The new store will build on the 30 access points for the No Interest Loan Scheme (NILS) and the four locations where StepUP, a low interest loan, is already available in South Australia through Good Shepherd Microfinance, NAB and community partners. Good Money will further the reach and access to these products and grow the number of loans from 1,150 written in 2013 by community partners around the state.
Good Shepherd Microfinance has also had ongoing discussions with Opposition Leader Steven Marshall. His office confirmed that “The South Australian Liberals are aware of the work of Good Shepherd Microfinance, NAB and their Good Money stores.”
“If elected, we would welcome the opportunity to further discuss how a Marshall Liberal Government can partner with Good Shepherd Microfinance and NAB.”
More than 17 per cent of Australian adults, or just over three million adults, are financially excluded. This number is significantly higher when we include impacted children. Financial exclusion exists where individuals lack access to appropriate and affordable financial services and products – the key services and products are a transaction account, general insurance and a moderate amount of credit.
This will be the fourth Good Money store in Australia. The inaugural Good Money store opened in Geelong in early 2012, followed by two others in late 2012, with strong support from the Victorian State Government.