At Lodex we’re all about financial inclusion and sharing stories that help more Aussies gain access to loans.
Adam Mooney, Good Shepherd Microfinance’s CEO, was kind enough to give us 15 minutes of his time to talk about the amazing initiatives Good Shepherd is driving, five tips for people in a challenging financial situation and some of their goals to help more Australians.
- Tell us a little about Good Shepherd Microfinance and the work you do?
Good Shepherd Microfinance is a leader in financial inclusion and offers a suite of people-centred, affordable financial programs for people who are struggling to access finance. These programs enable people on low and middle incomes to improve their financial wellbeing and resilience.
Research from the Centre for Social Impact (CSI) shows that financial resilience declined between 2016 and 2017. There are around 2.4 million people who are financially vulnerable and only 36 percent of the population considered themselves financially secure.
Good Shepherd Microfinance is connected to a rich heritage of social justice with a focus on women and children. Our flagship program, the No Interest Loan Scheme (NILS) was established by the Good Shepherd Sisters in 1981 to support women escaping family violence who needed to access credit to purchase essential household items.
Since then, we have grown to offer a range of affordable financial programs including: seven Good Money stores; the Good Insurance program which provides access to appropriate, flexible and affordable insurance options; the LaunchME micro enterprise program; and the Speckle fast online cash loan – to name a few.
- What are your goals over the next three years?
Over the next three years, we’re seeking to become the leading and most effective financial inclusion organisation in the region with the aim to research at least one third of demand for our key programs.
During 2017, there was a 15 percent increase in the number of people taking out a NILS loan – but we know that we’re only reaching a small proportion of the demand. We’re aiming to reach more than 100,000 people through NILS. Loans are available to people earning under $45,000 who have a healthcare or pension card. The loans are upto $1,500 to purchase essential items or services and are available through a national network of community organisations.
We’re also looking to substantially grow our LaunchME microenterprise program which supports people on low incomes to start and run a small business. There are 20 participants in South Australia at any one time who receive holistic support including coaching, mentoring, business plan development, access to finance (up to $5,000 at no interest), peer support through networks and skills training. Over the next three years, we’re aiming to reach 2,500 participants nationally through this program.
- Are there any new initiatives you are driving this year?
This year we made a bold move into online lending to launch Speckle – a fast online cash-loan which offers a better alternative for people seeking small cash loans under $2,000. Research shows that one in five households in Australia have used payday loans in the past three years. Speckle is backed by NAB and aims to offer a product that is better for customers by keeping the fees and costs as low as possible.
In most cases, Speckle loans are up to 50 percent cheaper than other small cash loans. Most lenders charge the maximum fees allowed by law. As a not-for-profit program, Speckle is significantly cheaper for customers.
To be eligible for a Speckle loan, applicants must be over 18, earn more than $30,000 a year (not inclusive of government benefits), and can’t have had two or more small amount credit contracts in the past 90 days. Where applicants are deemed unsuitable they are referred to other financial support.
- What are the 5 things you would advise people who are in a challenging financial situation?
My five tips for people who are in a challenging financial situation are:
- Don’t be afraid to ask for help. If you’re overwhelmed and you’re not sure what to do about your debt contact the National Debt Helpline on 1800 007 007.
- Make a household budget and stick it. It’s important to understand how much money is coming and going out each fortnight. Visit moneysmart.gov.au for tips.
- If you have some surplus income, then create a savings goal and plan. Set up a regular payment to your savings account in case of an emergency.
- Understand the difference between ‘needs’ and ‘wants’. Needs are essential (housing, food, clothing) and wants are what you’d like to have (name brand clothes, a new car). Wants can usually wait.
- Get informed and consider your options. If you do need to access credit, then make sure you’re informed about the total cost including fees and charges.
- Can you share a customer story?
We’re very excited to see our Speckle loan program is having a positive impact on people who are excluded from mainstream financial services. More than 50 percent of borrowers are women and a large number of loans are related to car expenses and repairs.
Customers tell us that cars are extremely important, particularly in regional areas that are not well supported by public transport. It’s great to hear stories about customers using Speckle to get the car back on the road so that they can get to work and take the kids to school.
We also provide additional support to customers who have been declined or are not eligible for a loan. This includes referrals to financial counselling and to our NILS program where appropriate.
We are very grateful that Adam gave us his time and shared his insights. Lodex is a huge supporter of financial inclusion and look forward to sharing many more amazing stories like these where people go out of their way to provide solutions for challenging situations.
If you have any questions please do not hesitate to reach out to us at [email protected]