Frances Ronowicz, head of community finance at BNZ, talks about the new no interest and low-interest loan initiative.
A new financial service offering no interest and low-interest loans has been flooded with inquiries since it opened its doors in April.
Yesterday the Community Finance initiative was officially launched at BNZ Tauranga, three years to the day since a pilot scheme launched in Auckland.
A partnership between the bank,Good Shepherd New Zealand, the Salvation Army and the Ministry of Social Development; the initiative is an option for people who cannot get a traditional bank loan and have exhausted their Work and Income options.
Tauranga caseworker Chika Adeosun said she had taken hundreds of inquiries since she started in April, working three days a week out of the Salvation Army centre on Cameron Rd.
She said most calls were from people who did not meet the loan criteria, usually because they wanted a loan to pay bills or pay off debt they had already accumulated. The loans were only for future purchases.
Ms Adeosun said they could still help by offering clients financial advice and direction, so they might get themselves into a position where they would be eligible for a loan. She could also direct people to other complementary services.
She said her last job in the collections industry showed her impact of bad debt, and said the experience made her appreciate how important the services "at the other end of the spectrum" were.
"It's really satisfying for me to be able to help."
Community Finance initiative caseworker Chika Adeosun. Photo/George Novak
At Monday's launch, Salvation Army community ministries manager Davina Plummer talked about a couple of people the service had helped since April.
One was a man in his 40s who had never had an email address. They gave him a loan to buy a laptop to aid his search for a job and let him set up his first email address.
"It was an exciting moment shared when we were the first recipients of an email from him," Ms Plummer said.
Another was a single mum of two who received a loan to buy a pram.
"It's more than a loan, it's a step up to a better quality of life."
BNZ Bank's head of community finance Francis Ronowicz said the bank provided the loans and took on the credit risk, committing $60 million in lending to the nationwide initiative over the long term.
Salvation Army community finance co-ordinator Jodi Hoare said that if people missed a repayment, the first step was always to talk to them about what was going on and try and help them through the problem.
Community Finances' loans
The Community Finance Initiative offers two types of loans. Neither has application fees, service fees or penalty fees.
- $1000-$5000 - Term of three months to three years - Interest 6.99 per cent p/a fixed - Pay back weekly, fortnightly or monthly
No Interest Loans
- $300 to $1000 - Maximum 12-month term - No interest
Use to buy...
- essential household items such as furniture or whiteware - second-hand cars - car repairs - computers - rental bonds - medical and dental expenses - education
