Microfinance Boost for Disadvantaged

‘Count Me In’ – the audience declares their commitment to the five goals of the Strategic Plan and financial inclusion. Picture: Ben Swinnerton

The Federal Government has helped launch Good Shepherd Microfinance, a Victorian-based community organisation that will provide financial assistance to vulnerable and disadvantaged Australians.

Good Shepherd Microfinance, formerly a division of Good Shepherd Youth and Family Services, is receiving more than $42.4 million in funding over three years through the Federal Government’s Financial Management Program to support vulnerable Australians trying to get back on their feet.

“Over the past 12 months, more than 22,000 people in almost 580 locations across the country have accessed Good Shepherd’s services to help them get a better grip on their finances,” the Minister for Families, Community Services and Indigenous Affairs, Jenny Macklin said.

“More than 18,500 people have accessed loans of up to $3,000 through Good Shepherd to help pay for expenses like a new washing machine, refrigerator or vehicle repairs.

“These no interest and low interest loans are provided in partnership with the National Australia Bank to help people on low incomes."

Christine Nixon, the Chair of Good Shepherd Microfinance, outlined COUNT ME IN, the organisation’s Strategic Direction for 2013 – 2018, which outlines five goals to reach people on low incomes to help them out of poverty and towards economic independence.

“Good Shepherd Microfinance’s goals will resonate strongly across Australia where one in eight people are now classified as poor, and three million people have no access to a credit card, bank account or insurance,” Nixon said at the launch at the Abbotsford Convent.

“Our work is centred on listening to the community and their needs in a bid to provide financial services and products that will help build assets, provide security and the wherewithal to allow people to be included socially and financially wherever they live in Australia.”

The five goals in COUNT ME IN are to:

• Reach one million people on low incomes with the right products and services at the right time.
• Influence financial system reform to ensure equity, access and economic inclusion for all people on low incomes.
• Measure the impact that microfinance is having on people’s health, social, employment and financial well-being.
• Inform the public, Governments and financial institutions about the need to address the barriers leading to financial exclusion.
• Ensure Good Shepherd Microfinance is well-governed, financially sustainable and links with the community, financial institutions and Government to deliver.

Adam Mooney CEO of Good Shepherd Microfinance addresses the audience. Picture: Ben Swinnerton

The Sisters of Good Shepherd initiated Australia’s first microfinance program over 30 years ago. Since then the program has reached over 100,000 people and families in partnership with 258 accredited community agencies, the National Australia Bank and the Federal Department of Families, Housing, Community Services and Indigenous Affairs.

In 2012, the Good Shepherd Microfinance was established as its own entity to consolidate and extend microfinance programs to include new products, locations and markets.

Nixon said the need for Good Shepherd Microfinance had become more acute since the Global Financial Crisis with changes to consumer banking regulations and tighter capital requirements that favour profitable customers and exclude people on low incomes.

“Since 2008, banks in Australia – with the exception of our foundational partner NAB which recently celebrated writing its 50,000 microfinance loan – have scaled back credit and essential financial services for people on low incomes and changed the debate to focus on consumer behaviour through financial literacy,” she said.

“In the space of four years there has been a rapid growth in payday lenders whose only business model is to entangle the client in perpetual cycles of expensive borrowing through unfair hidden conditions.”

Nixon said that the need for microfinance – small loans – had been recognised by the Federal Government through the provision of funding programs and carriage of legislation to tighten up payday lending activities.