Low income families in the northern rivers region of New South Wales are now the first non-metropolitan residents in Australia to benefit from Good Shepherd’s No Interest Loan Scheme (NILS).

Launched in Lismore this week, the NILS program will enable local people in need to access loans of up to $1,200 without fees or interest, to help with the purchase of essential household or medical goods and services.

Locals apply through a charitable organization named the Lismore Neighbourhood Centre, where they’ll have to fill out a bunch of paperwork and undertake an interview with a trained assessor.

If they meet the criteria, have a half-decent credit history and succeed in getting the loan, they can then pay the loan back in small installments, say $20 a week. Then once they’ve paid off the loan, the National Australia Bank gives them $500 to go into a special personal savings account – that’s money for nothing!!

The program is an initiative of the Good Shepherd Youth and Family Service, which was founded by the Sisters of the Good Shepherd in France and became an Australian entity back in the 1970s. They began their No Interest Loan Scheme in the 80s, but it wasn’t until their massive funding injection delivered by the Rudd Government last Poverty Week (October 2009), followed by increased support state governments, that they were able to really start expanding.

Now they’re rolling out to regional Australia, with residents of the Northern Rivers region the first in the bush to benefit!

Before Monday’s launch, there were already 280 accredited NILS programs across Australia (only in capital cities) writing on average approximately 5,500 loans every year.

As well as providing loans and matching savings, the Service offers financial counselling and other services aimed at financial inclusion for people on low incomes – and Good Shepherd depends on donations from the community too, to support these services.

The most common goods purchased through the scheme are washing machines and refrigerators, while the most common services purchased are medical or dental services. The occasional loan is also given to people in communities without public transport to assist with motor vehicle repair costs (that’s us!).

Chris Walsh, CEO of Good Shepherd Youth & Family Service said he was really looking forward to being able to work with the Neighbourhood Centre on this great initiative, which will strengthen the provision of fair credit and services for struggling local people.

You must be wondering how it is remotely possible that a bank would give away $500 to a low-income earner – me too! It’s part of a relationship between Good Shepherd and NAB, both of whom are endeavouring to teach people how to better mange their finances and get into good habits when paying off debts.

Over the last ten years, the two have worked closely to develop and introduce the NAB low interest loan known as StepUP. “These loans help customers develop a credit history as well as improve their financial literacy and confidence,” Mr Walsh said.

Too good to be true? Apparently not – so if you live in the NSW northern rivers region, you’re a bit low on money and your fridge just exploded, head down to the Lismore Neighbourhood Centre and apply for this increasingly essential service!

Posted: Tuesday December 8, 2009