What drives us
'Three years ago my son asked me why he couldn't go to grade 2 camp with his friends. I didn't have the courage to tell him that since my marriage broke down I had no money, so I said I needed his help at home. He always told people his mum was strong and invincible and I didn't want to change that. To pay for the dentist and bond for a new place I borrowed from one of these fast money places. This got me into trouble for about two years until I visited a financial counsellor and then took out a no interest NILS loan to buy the fridge and washing machine I was renting. Since then things have been looking up and I'm getting on top of my budget. My daughter is now ready to go to the same grade 2 camp and I can manage it now. My son, now 11, gave me a hug and told me that he now understands about money and is happy that his sister can go to camp.'
One of our NILS clients shared this moving story with me late last year. I also have a daughter in grade 2 and can't imagine having to say that she can't go to camp. This keeps me focused and reminds me why we are doing this work - it enables hope, dignity, belonging, love and human connectedness. In the lead up to International Women's Day on 8 March, I pay tribute to all of our clients and committed providers who are improving the lives of many, but especially the three out of four of our clients that are women. Women determined to take action themselves to improve their own lives and the lives of their children with courage, tenacity and grace. We estimate that of the 125,000 loan clients we have reached so far, at least half a million people - partners, children, carers, housemates... - have been positively impacted in a similar way to the family of the client I met.
This year begins at Good Shepherd Microfinance with our clients and providers always at the centre of what we do. Around the world things are getting tougher for most people and especially tough for those marginalised and on low incomes. Good Shepherd Foundress, St Mary Euphrasia, said that 'one person is worth the whole world'. We will always be driven by that and I hope we all - not just governments, media and companies - remember that we are collectively better off when all people have hope, dignity and are valued and included for who they are and what they bring.'
Outlook in 2014 - political and economic
The year in financial inclusion and community development has begun with broad concerns across the sector regarding austerity driven cuts to Federal and State government funding of community services. In an address to the Australian Institute of Company Directors two weeks ago, Minister Kevin Andrews outlined the need to get the balance right between economic vitality and social responsibility. During 2014 the Minister will be developing an outcomes framework for social services likely to be around three pillars: children having quality education; strength of family relationships, and; meaningful employment. Focus on reducing national debt of $283 billion will be a big priority and Minister Andrews own budget of $110 billion is expected to contribute to savings and debt reduction.
The Minister stated that he would be focused this year on reviewing income support, putting resources into the right area, cutting red tape for the sector, establishing a centre of excellence for Not-for-profits (abolishing the Australian Charities and Not-for-profits Commission, the ACNC), trusting the community sector to know manage its business and stopping government interference, promoting community business partnerships, raising community awareness and the volume of charitable donations, currently at $2.2 billion a year and 'community building' by investing in activities that leverage high rates of volunteerism.
Community programs that don't measure outcomes and don't support some sort of economic mobility will increasingly be under pressure to retain funding. Opportunities are presented for microfinance and financial inclusion programs in this environment and the Minister and his office have sought and welcomed our advice in contributing to this thinking.
2014 will also be characterised by whole of system reviews where the pillars of social and economic development come under scrutiny. The Government is coming under pressure from business and others to listening less and act more and having a clear position on economic policy. It is likely that this will occur after the May budget in the second half of 2014.
The Treasurer announced the members and terms of reference that will comprise the Financial System Inquiry, chaired by David Murray. This inquiry is due to report in November 2014 and the ABA think that financial inclusion will be a prominent part of the focus, given the terms of reference and are actively engaging with community stakeholders, including Good Shepherd Microfinance.
Peak body ACOSS will continue to lobby for income support to be raised, especially Newstart, from $35 a day, along with other reforms. Pragmatism, rather than idealism will be a continued theme of their work this year.
Australia will host the G20 in November in Brisbane with a key theme of the meeting being social inclusion in a time of economic austerity. The build up to this meeting with preliminary workshops and dialogue will be important and we can play a role in this.
Economic growth is forecast to improve later in the year in Australia as a rebound in the USA and revitalised, but more modest growth trajectory in China gives confidence in our region. It is likely that once economic growth returns above three per cent in 2015, the austerity valve will be released slowly and increased investment in social services made.
New funding is confirmed by the Queensland Government for microfinance development in Queensland for three years to extend Good Shepherd Microfinance’s programs .
Good Money continues to attract interest from various states and especially in Victoria where our three stores are having a very positive impact, to be evaluated in the coming months. Our Debt Deduct (consolidation) program is performing well in Victoria and is sparking real interest along with a scaling up of NILS and StepUP, especially in South Australia from both main political parties.
We have met with the Office of Fair Trading in NSW this month as well as the Minister late last year, who have both confirmed interest in Good Money in New South Wales.
Good relations have been established with the Federal Government in 2013 through meetings with our Chair and Deputy Chair. I will be participating in the 'Rethinking Financial Inclusion' at the Harvard Kennedy School of Government later this month. I have actively been encouraged by both Minister Andrews and Treasurer Hockey's advisors to develop a brief for them on this valued program when I return in early March.
In New Zealand Government is soon to choose its banking partner for a new microfinance program focused initially on motor vehicles. Both lead banks, BNZ and Kiwibank, have committed to working with Good Shepherd Microfinance in partnership and this was reflected in their proposals to Government. Our pilot program support to Good Shepherd New Zealand Trust continues involving a Good Shepherd led workshop in New Zealand for financial inclusion actors in March.
Our insurance work will move into program development phase in the first half this year. Funding from the Smart Services CRC, with additional support from the Insurance Council of Australia, together with partnerships with two insurers will enable a renters policy and motor vehicle policy pilot program to be developed. Additional sources of funding may also be available.
MoneySmart Week in the first week of September will again be a feature of the financial inclusion agenda in 2014. I have been invited to join the advisory committee to provide a voice for the community sector and am very impressed with the plans and possibilities emerging this year to engage all Australians in making positive steps in relation to money health.
Good Shepherd Microfinance, together with the Brotherhood of St Laurence and several universities and other stakeholders are working on a joint bid in the first six months of 2014 to establish a $25 million Financial Inclusion Cooperative Research Centre. This will enable collective learning, efficiencies and clearer shaping of policy and research to realise financial inclusion. A decision will be made in late 2014 on this bid by the Federal Government.
Event planning has started for 2014 across Good Shepherd Microfinance. StepUP's ten year anniversary is this year and will be a highlight, as will be the launch of our NILS evaluation report by the Centre for Social Impact in March. Our National NILS conference will be held in Brisbane on 12/13 June this year and we are considering a financial inclusion summit later in the year with NAB.
Work is continuing with NAB to find innovative ways to reach large numbers of people in casual work, who are partly financially excluded, using technology.
Work and engagement on supporting the development of microfinance in Good Shepherd's missions overseas continues. I am meeting with debt investors in February in New York, along with the Centre for Financial Inclusion in Washington DC, Women's World Banking, Accion and Citi to seek advice and guidance, building on a commitment and interest expressed by Good Shepherd leaders from around the world in Bangkok late last year.
It promises to be a challenging and exciting year in financial inclusion and microfinance in 2014. We are fortunate to be part of a well-connected and diverse network of people, especially talented knowledgeable volunteers and organisations across Australia. These people are committed to making our communities better places where everyone can experience the fullness of life, however they define it, where economic mobility is enabled through fair, safe and affordable finance services.