A loan scheme established almost 20 years ago to enable low income earners to access an alternative form of credit has marked $3 million in loans.
The Josephite Foundation No Interest Loan Scheme (NILS) was founded in Bathurst in 1999 by the Sisters of St Joseph. It was modelled on a scheme developed by the Good Shepherd Sisters in 1981, and enables low income earners to access an alternative form of credit to purchase essential household items.
The loans do not attract interest and there are no fees, and once the borrower begins repayments the funds are then available for someone else in the community to borrow.
Josephite Foundation executive officer Kirsty Gilmore said, since its humble beginning in Bathurst, the NILS has expanded to Lithgow and other regional communities including Cowra and Young.
She said the NILS reached the $3 million dollar milestone in March, which was achieved through 4048 loans.
“So far we’ve loaned $3,004,000. Our first loan was in Bathurst back in 1999,” she said.
Ms Gilmore said what the NILS has achieved was pretty impressive.
“What we aimed to do is give people on a low income access to fair and affordable finance.”
She said often people who fell into this category were not eligible for personal loans and credit cards and were forced to borrow from pay day lenders or obtain the item on a rent to buy scheme, both of which charged exorbitant fees. People could end up paying up to three times the amount of the retail price of the item.
“They feel they have no other choice, and they get sucked into the debt trap and can’t get out,” Ms Gilmore said.
“With NILS, there is no interest, no fees and the repayments can be as little as $20 a fortnight.”
Ms Gilmore said borrowers use the money for essential household furniture, white goods and mobility aids, to name just a few examples.
“The loans really are life-changing. We’ve had one lady take out 15 of them, and she has been able to update everything in her house.”
Those eligible for a loan must live in the local government area, have lived at their current address for at least six months, have a current Health Care Card or Pensioner Concession Card, and afford to repay the loan in small fortnightly repayments.
The scheme has recently been opened to low income earners who are working.