ANZ Reviews the Progress Loans Project

An evaluation of the ANZ Banks Progress Loans project delivered in partnership with the Brotherhood of St Laurence has found it is effective at meeting the key financial needs of people on low incomes and that the program provides a positive, respectful customer experience.  

The research also demonstrated that the program helps respond to financial exclusion by linking people on low incomes to the mainstream banking system and providing safe and affordable credit.

The main objective of the research was to assess the effectiveness of the Progress Loans program in meeting the financial needs of consumers on low incomes and to identify ways to improve the program and strengthen its positive social impacts.

ANZ, together with the Brotherhood, say they will use the findings in this report to refine, improve, and potentially expand Progress Loans.

Tony Nicholson, Executive Director of the Brotherhood of St Laurence says many people on low incomes have traditionally been excluded from affordable mainstream financial services and have often had to rely on very expensive forms of credit or simply going without household items that most Australians take for granted.

Nicholson says that with Progress Loans, BSL is able to assist many of these families on low incomes to borrow money via the mainstream credit market in a way which is sustainable and protects them from exploitation.

The report highlights the case study of ‘Margaret’ who is in her late fifties and rents from the Victorian Office of Housing. The Progress Loan has helped her to purchase ‘nice things’ for the first time in her life. She has had three loans with the Brotherhood over a period of years. She has used past loans to purchase necessities such as a washing machine, a lounge suite and a refrigerator.

Her latest Progress Loan was used to purchase an air conditioner, a BBQ and a television. These items have assisted her to maintain contact with friends.

Margaret told the researchers that at 55 it’s the first time in her life that she’s had nice things. She couldn’t afford them otherwise, because she was only on the disability pension. 

Margaret left school at 13 and had never had any form of credit prior to loans through the Brotherhood. The loans have helped to build her confidence.
 
Progress Loans gives people in Victoria, Australia, on low incomes access to loans of between $500 and $3,000 to pay for essential household items. 

The Progress Loans program was launched in May 2006 in response to ANZ-commissioned research conducted by Chant Link and Associates into the levels of financial exclusion in Australia.

The research showed that many Australians struggle to access appropriate low-cost, fair and safe financial services from mainstream providers – meaning they either go without, or resort to credit on unfavourable terms from non-mainstream providers. 

Since the research project, ANZ has been working with community partners including the Brotherhood of St Laurence to improve financial inclusion in Australia. The Progress Loans program was the culmination of more than 18 months of consultation and development work to ensure that it met the needs of people on low incomes.

The Progress Loans program aims to:
– be affordable for eligible customers with transparent fees and charges
– be financially viable in the long term
– effectively reach as many eligible customers as possible
– build a sense of dignity, empowerment and confidence among eligible customers

To be eligible for a Progress Loan, applicants must have a Health Care Card or Pension Card issued by Centrelink, have lived in the same residence for more than six months, and be up to date with utility bills and rent.

More than 300 Progress Loans were approved during 2008 exceeding the target for 2008. The majority of people receiving a Progress Loan are women (64%), and the most common items purchased are cars (28%).

In April 2008, ANZ and the Brotherhood of St Laurence received the Prime Minister’s Award for Excellence in Community Business Partnerships for Progress Loans.