NO-INTEREST LOAN SCHEMES

The Hon. G.A. KANDELAARS (15:43): Today I would like to speak about no-interest loan schemes, or NILS for short. It has been 30 years since the first NILS loan was taken out at the Good Shepherd Youth and Family Services Collingwood office. Those 30 years have been a time of exponential growth and have brought about an increasing recognition of microfinance as a means to turn around people's lives.

In 1981 the Good Shepherd Youth and Family Services started its first NILS program in Victoria, with funding, foresight, vision and generosity of the Good Shepherd Sisters. During the 1980s, the program was refined and the core principles and practices underpinning the program were consolidated. In the early 1990s, two more Good Shepherd Youth and Family Services NILS programs were developed at different sites and the Good Shepherd buying service was established. The wider community and services network became aware of NILS, and a number of other community NILS programs were started, with funds provided by philanthropic organisations.

Since the first NILS loan was approved in 1981 the rapid growth of NILS now sees it firmly placed as the largest microcredit network in Australia. A major contribution has been made to NILS by the National Bank of Australia, which has provided over $23 million to expand the NILS program across Australia. Over time, NAB support for the NILS network is expected to treble the number of interest-free loans currently offered to Australians living on low incomes. With the NAB's support, NILS expansion is focused on communities experiencing disadvantage, including Aboriginal and Torres Strait Islander communities. I commend the NAB for its commitment to NILS.

Let me give you an example of NILS in use in our community. This particular case is from North-East NILS. The client was a single woman in her 50s receiving a Centrelink Disability Support Pension and in Housing SA accommodation. She had been assigned a financial counsellor who kept in touch with her to ensure that she managed her finances successfully. She had successfully completed her first NILS loan. The loan was used to purchase a washing machine. She really appreciated the opportunity of obtaining household goods without having to pay interest and charges.

An application for a second loan was successful and the client purchased a fridge. She was very thankful when the trader whose quote she had chosen agreed to deliver the goods and accept payment on delivery. Traders who are members of the NILS charter commit to supporting and providing good service to the client group. Approximately four weeks after taking delivery of the new fridge, the client telephoned the North-East NILS quite distressed and advised that she was concerned about her financial situation.

Unfortunately, her cat had taken ill and required veterinary assistance and she was concerned about how she was going to manage the account from the vet. She asked if the amount could be added to a NILS loan. It was explained that this was not possible under the NILS process, but her financial counsellor could negotiate on her behalf for a loan repayment for the vet account. The client was most relieved, and the financial counsellor negotiated with the veterinary surgeon a repayment program that was manageable for the client. This case clearly indicates the positive impact that a NILS loan can have on the health and wellbeing of clients.

NILS offers people on low incomes an opportunity to access safe and affordable credit for essential household items without fees, charges or interest payments. In an environment where mainstream credit for people on low incomes is limited and the fees and charges levied by fringe credit options such as pawnbrokers and payday lenders are high, NILS makes a considerable difference to the nature of economic participation by individuals and families living on low incomes. I also acknowledge the commitment from many of the volunteers who help run NILS. They provide an invaluable service to those less fortunate than ourselves, and I commend them for their efforts.