Legislative Council: Wednesday, July 03, 2019


Matters of Interest

Good Shepherd Microfinance

The Hon. D.G.E. HOOD (15:19): I rise to speak about Good Shepherd Microfinance, an organisation that is regarded as a leader in financial inclusion product services and advisory services. It works in collaboration with the corporate, government and community sectors to create programs that enable low-income clients to improve their financial situations and realise their own economic mobility.

I have personally met with representatives from Good Shepherd on numerous occasions and I am impressed by the impact it is having in many local communities, with a focus on assisting the most vulnerable members of our community. Good Shepherd certainly has a long history. In fact, it dates back to 1835, when Saint Mary Euphrasia Pelletier founded the Sisters of the Good Shepherd in France to assist women and children in need.

To provide alternative options for vulnerable Australians, the Sisters of the Good Shepherd established the no-interest loans scheme (NILS) in Australia in 1981, which offered no-interest loans to men and women for the purchase of essential items. Their operations expanded rapidly in the following decades and now Good Shepherd offers safe, fair and affordable financial products to people on low incomes, and advisory services in 600 locations across the nation.

In our state alone, 15,000 South Australians are currently receiving benefits either through the NILS or the Good Shepherd's program StepUP, which provides larger low-income loans on a not-for-profit basis, delivered in partnership with the National Australia Bank. Unlike payday loans, no exorbitant fees are incurred, along with excessive and unaffordable interest rates.

Another one of Good Shepherd's initiatives that is unique to South Australia is the LaunchME microenterprise pilot program that was developed in 2017 to assist people in acquiring skills to commence their own business or join the workforce. It supports clients' small business aspirations through a range of services, including coaching and mentoring, support for documented business planning, guidance in the attainment of new enterprise, access to networking opportunities, referral to specialist advisors and, of course, access to no-interest finance when business plans are sufficiently mature.

Over the life of this program to date, 75 per cent of participants have generated income from their entrepreneurial ventures, with 19 per cent obtaining employment. The success of LaunchME in our state is unsurprisingly attracting investment and interest from the Victorian and commonwealth governments, who have an interest in establishing a scheme similar to that in their own jurisdictions.

The collaboration between Good Shepherd Microfinance and the South Australian, Victorian and Queensland governments, as well as the National Australia Bank, has also enabled seven Good Money stores to be established. The stores are strategically located near high-cost lenders to provide people in the community with a visible choice and to prevent predatory lending.

They give clients the opportunity to take the important initial steps in making responsible and sustainable financial decisions through discussing in person how Good Shepherd's financial products can lead to long-term financial self-management. This particular operation expanded into South Australia in 2015, with the opening of a Good Money store in Salisbury, and I am informed that in the last year it has been able to issue some 350 loans.

Many of the three million people experiencing financial exclusion in Australia have been turned away from mainstream financial institutions. Unfortunately, many of them, in their desperation, end up using high-cost credit options, such as payday loans or rent to buy services, and can become susceptible to having to take repeat loans that lead to spiralling debt.

I take this opportunity to commend Good Shepherd Microfinance on making a significant contribution to the South Australian community through offering their much-needed services. The Marshall Liberal government is certainly pleased to continue its partnership with this organisation, to build confidence in those experiencing financial hardship to help them take control of their future and their finances.