Victoria continues to lead the way in delivering innovative solutions to financial exclusion thanks to an injection of $1.7 million in funding announced as part of the Victorian Government’s budget.
Good Shepherd Microfinance and National Australia Bank (NAB) welcomed the funding which will support the continued operation of three Good Money stores in Dandenong, Collingwood and Geelong for a further 12 months.
CEO of Good Shepherd Microfinance, Adam Mooney, said that Victoria had a leadership role in providing alternative financial products for people on low incomes who are excluded from mainstream finance.
“A first of its kind in Australia, the Good Money stores are a retail shop-front, designed to compete more directly with fringe lenders by providing microfinance products and assistance to people living on low incomes,” he said.
“Importantly, we’ve started an evaluation to examine the social and economic value of Good Money. We believe this evaluation will demonstrate the reach and impact of the program, helping us to build a robust case for long-term investment by the corporate and government sectors,” said Mr Mooney.
Since opening in 2012, there have been more than 9,000 enquiries at the three stores, 1,050 loans and 1,900 financial conversations. The model has proven to be extremely effective with around 70% of people who make enquiries going on to become Good Money customers.
The Good Money stores provide:
- Access to small loans through the No Interest Loan Scheme (NILS) and StepUP
- Access to Debt Deduct – a debt management service
- Connections with other local support services e.g. financial counselling
- Financial conversations that focus on the client’s needs and build capacity
Good Money is a joint partnership between NAB, Good Shepherd Microfinance and the Victorian Government.
Corinne Proske, Head of Community Finance and Development at NAB, said Good Money has demonstrated it can help break the cycle of people turning to high interest fringe lenders when they need financial assistance.
“Around 86 per cent of customers have never accessed community finance, but 34 per cent have used fringe lending services. Significantly, more than half of these customers have said they do not intend to use a fringe lender again.
“This model, with the Government’s support, is helping us explore innovative alternatives to address the issue of financial exclusion,” she said.
In March 2014 the South Australian Government announced its intention to launch a Good Money store in that state, leveraging the successful model already operating in Victoria.
According to the annual Measuring Financial Exclusion in Australia report, commissioned by NAB and conducted by the Centre for Social Impact, there are more than three million people in Australia who are severely or fully financially excluded, meaning that they don’t have access to a moderate amount of credit, a basic transaction account or general insurance.