$10 million to wean people off loan sharks

Stuff reports:

A Government initiative will offer interest-free and low-interest loans to low-income borrowers banks don’t normally lend to.

BNZ announced today it would commit $10 million to a community finance initiative in partnership with the Government, Good Shepherd NZ and The Salvation Army.

BNZ spokesperson Michelle van Gaalen said the programme, to start with a one-year pilot, was designed to help people become self-sufficient and get away from using payday lenders and loan sharks.

“BNZ wants to help all New Zealanders be good with money, including those who currently don’t have access to conventional sources of credit,” van Gaalen said.

“Traditionally banks haven’t provided loans to customers with minimal income, so those people have been using the only other option they feel they have – borrowing at extortionate rates.”

Loan sharks and payday lenders charge crippling levels of interest. Smart Cash charges 365% interest and they’re one of the cheaper ones. Ferratum goes up to 800% interest. Can’t Wait is 521%.