You don't have to remember Ponsonby before it got flash to appreciate new Kiwi flick The Insatiable Moon - but it certainly helps.

The inner-city Auckland suburb was not always the haunt of glib, glamorous glitterati. Barely a generation ago it was home to students and big Pacific Island families and the widows of wharfies who carried their shopping in string kits and grumbled that things were better in Mickey Savage's day.

And there were the twilight people: mainly men, they were the product of the new "community mental health" initiatives, unreliably medicated psychiatric patients living on benefits in the boarding houses that were a feature of the landscape.

Mike Riddell knows something of that demi-monde because he moved in it. A theologian by training, he was the vicar at the Ponsonby Baptist Church in Jervois Rd, a ministry in which he often rubbed shoulders with the psych patients. I recall a moving funeral service he conducted there for a childhood friend of mine, Alan Stimpson, a florid, gentle-giant schizophrenic who had taken his own life.

"People like Alan would have a social welfare grant to pay for their funeral," Riddell recalls, "but it wasn't enough. So we had an arrangement with an undertaker that he would lend us a coffin so we could put on a funeral and then they'd bury him in something more modest. The Baptist system is a fairly miserable bloody denomination in some ways but the Ponsonby Baptist Church happened to be a group of people who were a bit more broadminded and interested in people. There was so much humanity and humour at those funerals. They were great."

Just such a funeral is a central scene in The Insatiable Moon and it's filmed at Ponsonby Baptist - "It was the director of photography's decision because he liked the inside of the church," says Riddell.

One character's eulogy consists of repaying the deceased's many kindnesses by laying a cigarette on the coffin lid. "That's a tailor-made too," she adds for emphasis.

So it goes without saying that The Insatiable Moon is a portrait drawn from life. Riddell wrote it as a novel and then, over several years, adapted it into the screenplay for the film which an opening title describes as "inspired by Arthur of Ponsonby".

"Arthur lived in a boarding house that doesn't exist any more down Shelly Beach Rd," says Riddell. "He was a lovely guy, a big fella with long hair, who looked a bit like [Tuhoe prophet and activist] Rua Kenana. He was illiterate but very engaging and charismatic, a fluent Maori speaker.

"He used to come into the vicarage sometimes and ask me to tell people that he was the second son of God, so we used to have great conversations. And after one of those sessions I thought: 'Gee, what if he is the second son of God? How would I know?' And that was the creative spark for the story."

To say that it sounds improbable, even banal, is to understate matters. But Riddell makes it work, both by his unforced skill as a writer and the deep humanity of the story.

The same humanity infuses the film, one of the most modest Kiwi flicks in a long time, but one that gets under your skin. A cast to die for includes Rawiri Paratene as Arthur (when people say "Lovely day", he replies "Thanks. Glad you like it"; Sara Wiseman as Margaret, a social worker whose marital crisis puts her on a collision course with Arthur; a terrific Ian Mune as an unrepentant dero; and show-stealer Greg Johnson, as the cheerfully foul-mouthed and relentlessly good-hearted proprietor of the boarding house that is home to Arthur and the other psych patients. And the story, a winning mix of pathos, humour and, well, wonder, concerns the challenge posed to Arthur's celestial pedigree when the boarding house is threatened with closure.

Shot for $340,000 and post-produced for $120,000, The Insatiable Moon deserves to be dubbed The Little Movie That Could. But it very nearly never happened. It started life as a $6 million co-production with English stars Timothy Spall and James Nesbitt signed and Scots director Gillies Mackinnon (Tara Road, Hideous Kinky) named to direct. But when the New Zealand Film Commission, the cornerstone investor, got cold feet and pulled out, most of the other conditional funding collapsed.

"We were devastated," says Riddell. "We went through a week of despair in which we thought that we'd have to fold the whole thing. And then we thought: 'Bugger it. Let's do it anyway'."

The eventual director was not far away: Mike's wife, Rosemary Riddell, a district court judge in Hamilton, had directed some theatre and an award-winning short film called Cake Tin, about an old woman who breaks out of a nursing home.

"She had booked her leave," says Riddell. "She thought she was going to swan around Ponsonby and sit in cafes while we were shooting the film, but when we decided to go ahead we had to draw on any resources we could find. Rosemary knew the story backwards and forwards."

The film owes much of its look to the consummate camerawork of DoP Tom Burstyn, who aptly describes his mission statement as "frugal film-making": his entire rig fits in the back of a single Ford Transit van. His professionalism notwithstanding, there are occasional rough moments, but they seem insignificant in the context of the film as a whole.

Riddell is not a Baptist vicar any more. He and the Baptists parted company long before the film was made. He was teaching theology at the Baptist Theological College in Penrose when he got a publishing deal, so he sent the manuscript to the head of the Baptist Union.

"He wrote back and said he really enjoyed the book, 'but there's no way you can continue in employment once it comes out' so I respectfully tendered my resignation."

Oddly the church was less concerned by the notion that the personification of the Second Coming might be a hairy Maori schizophrenic than by a sex scene - an admittedly eye-watering, 18-page affair that, to put it mildly, reimagines Immaculate Conception. (It's much more restrained in the film).

"It felt like a bit of a kick in the guts, really," Riddell says. "My creative endeavour was a big part of who I was and one of the reasons I'd been associated with the Baptist church is that they had this principle of freedom of belief. This seemed to be a total contradiction."

Riddell's varied CV includes baker, welder, painter, roofer and truckie as well as theologian. But these days he's a writer.

"It took a long time to feel comfortable with calling myself a writer but that's what I call myself now because that's all I do."

He's working on a script about the 1981 Springbok Tour focusing on the aborted game in Hamilton. Only time will tell what it will be like, but if his first film script is any guide, it seems safe to bet that he will get the tone just right.

Who: Mike Riddell, writer and film-maker
What: The Insatiable Moon
When: Opens at cinemas on Thursday.