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In this edition,  a year end message from our CEO, highlights from our 2014 Annual Report, 'A Life Changing Journey', our thoughts on the Financial System Inquiry supporting financial inclusion initiatives, we announce the date and location of the 2015 National NILS conference, we share a daily client story in the lead up to Christmas and consumers urged to avoid payday loans this holiday season.

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A good year 
As 2014 ends, good progress has been made on all strategic priorities and we are well positioned to harness significant opportunities in 2015.

We have invested heavily in our core foundational programs and are determinedly consolidating and building our new programs. Evaluations of each program show that we are having positive impact. Four out of five clients are moving away from crisis and hardship towards stability and resilience - achieving economic mobility. Four out of five clients who have used payday lenders in the past have stopped using them since accessing our programs.

We are effectively reaching our target market with 94 per cent of clients living in poverty, of which 68 per cent are women and 22 per cent are Aboriginal people. And, we are reaching more people than ever before - 28,093 direct clients this year. Yet, we are only reaching six per cent of those that need fair, safe and affordable financial services.

Our future focus will be on investing heavily in our existing programs to more fully connect with clients and building new options for digitally proficient clients to deepen our product and channel offering.

Finally, I would like to thank you for your support and commitment to our important work and wish you a very Merry Christmas and Happy New Year. Together we are having a positive impact in the communities we live in and enabling hope and human connectedness for ourselves and millions of others. 

Adam Mooney
CEO, Good Shepherd Microfinance
 
This financial year more than 28,000 clients joined the microfinance journey – clients whose stories are shared in our 2014 Annual Report, ‘A Life Changing Journey’.  Women like Shahla (pictured) who had to sacrifice studies and work because she couldn’t afford to buy a car and men like Robert who unexpectedly found himself without any possessions, money or a place to live. A life changing loan made a huge difference to these people. Highlights of our growing programs are: 

No interest loans change lives 
Our flagship program NILS is a national community-based initiative offering clients on low incomes access to fair, safe, no interest credit, up to a value of $1,200.
 
This year 24,378 loans were issued, the highest ever in a 12-month period, totalling almost $22 million. This year’s write-off rate was 5.66 per cent. 
 
Women are the primary borrowers (68 per cent) with the typical age of 35-44, the average loan amount was $902 and the main items purchased continues to be fridges and washing machines. However, the loans are increasingly being accessed for other items such as lounge suites, beds and mattresses, personal computers and televisions. Read more.

A step in the right direction
StepUP is a low interest loan for people on low incomes who have difficulty accessing credit from a bank. Today StepUP loans are available at 39 sites across all states. In the past year alone, 2,950 loans were approved with a cumulative value of $8.4 million.

Through our innovative partnership with NAB people can borrow between $800 – $3,000 at 5.99 per cent per annum with up to three years to pay it back. This year, StepUP’s write-off rate was 6.78 per cent.

More than 70 per cent of loans are vehicle related and 62 per cent of clients live in public or private rentals. In May 2014, the Bank of New Zealand committed $10 million over five years to enable the expansion of the NILS and StepUP programs into New Zealand. Read more.

Good Money to get you going
Good Money is an innovative concept that delivers community finance in prominent ‘high street’ locations. Together with NAB and the Victorian Government, we opened our first store in April 2012, and two years down the road, more than 10,000 people have approached Good Money. A total of 1,508 NILS and StepUP loans have stimulated local economies, enabling $2.3 million of NAB capital to be utilised.
 
Customers are younger on average than clients reached through our community providers and 43 per cent of enquiries to Good Money come from men. Approximately 90 per cent of clients receive government income support and less than one in 10 clients is employed.
 
With the number of loans steadily increasing by an average of 10 per cent each month, we are now expanding the program. The South Australian Government has committed funds to open a store in Adelaide within the next year. Read more.
FSI supports financial inclusion initiatives
The Financial System Inquiry’s support for continuing industry and Government efforts to increase financial inclusion is a positive step, however Good Shepherd Microfinance has expressed its disappointment that the report did not include any specific recommendations to invest in the further development of microfinance initiatives.

“We welcome the Inquiry’s recommendation to explore ways to facilitate the development of the impact investment market and encourage innovation in funding service delivery,” said Good Shepherd Microfinance CEO, Adam Mooney.

“We now urge the Government and the Reserve Bank of Australia to make direct investments to strengthen financial inclusion and resilience through the expansion of microfinance and alternative financial services options for people on low incomes.”

There were 44 recommendations on banking, superannuation and credit cards, including:
  • Major banks to lift capital requirements
  • More independent directors for superannuation funds
  • Credit card surcharges eliminated or reduced
  • Improve competency of financial advisors
Read our media release.
 

Save the date: National NILS Conference
The National NILS Conference is held every year to inform and celebrate the audacious NILS network. The conference is attended by community finance leaders, NILS workers and volunteers across two days of workshops, interactive activities and panel sessions. We’re pleased to announce the 2015 National NILS Conference will be held on Thursday 11 and Friday 12 June 2015 at Australian Technology Park in Eveleigh, an inner-city suburb of Sydney. Stay tuned for an exciting line up of speakers and workshops discussing the opportunities and challenges of inclusive finance in Australia and around the world. 

If you’d like to register your interest for the conference, please visit: nilsconference.org.au.
12 days of life changing loans


Take some time this holiday season to read our client stories – you’ll hear how Candiannd, mother of four, was struggling to pay for the trips to the laundromat until she found NILS and how John was forced to take out fast cash loans from payday lenders for $150, and pay back $250 or more each time until he found Good Money in Collingwood.  Our no and low interest loans have made a real difference for these people.

Follow our stories on twitter.com/microfinancegs or facebook.com/microfinancegs.
Avoid payday loans this Christmas
Good Shepherd Microfinance has warned people on low incomes to shun payday lenders this Christmas as it will set them up for a cycle of debt in the New Year.
 
The number of Australians at risk of high cost lending tactics is significant, with NAB research showing that almost 20 per cent of Australian adults (18.7 per cent) rarely or never have any money left at the end of a pay cycle.
 
Good Shepherd Microfinance CEO, Adam Mooney, said that people on low incomes were especially vulnerable to payday lenders at Christmas, but warned: “The true costs of a quick cash loan can spiral and clients can end up paying a lot more in interest and fees.”
 
“These high cost lenders target people on low incomes with promises of fast cash and online same day approval,” Mr Mooney said.
 
“Many people feel they have a lack of choice, but there are other options such as no interest and low interest loans. We urge people to avoid payday lenders this Christmas.”
 
Mr Mooney said that clients often turn to Good Shepherd Microfinance at Christmas because an essential appliance such as a fridge has broken down and the cost of replacing it will leave them without money for presents or food.  

Read our media release.
Microfinance Matters will return in February 2015.
Wishing you a safe and happy Christmas and New Year.