Nominate
MEDIA, JOBS & RESOURCES for the COMMON GOOD
NEWS  |  Politics

CDFI Pilot Extended


Monday, 25th February 2013 at 10:23 am
Staff Reporter
The Federal Government is to provide an additional $1.2 million to extend a pilot program that gives vulnerable Australians access to small loans and financial literacy training.

Monday, 25th February 2013
at 10:23 am
Staff Reporter


0 Comments


FREE SOCIAL
SECTOR NEWS

 Print
CDFI Pilot Extended
Monday, 25th February 2013 at 10:23 am

The Federal Government is to provide an additional $1.2 million to extend a pilot program that gives vulnerable Australians access to small loans and financial literacy training.

The Minister for Community Services, Julie Collins, says the Community Development Financial Institutions initiative had been a success over its 15 month trial.

“This initiative fills a gap for vulnerable Australians who are able to repay a loan but are excluded from the financial mainstream because of low incomes or poor credit history.”

In March 2010, the Federal Government provided $6.03 million of seed funding to five organisations to carry out a Community Development Financial Institutions pilot.

These organisations raised a further $3 million for the loan capital from philanthropic and private investment.

“Community Development Financial Institutions act as the ‘middle man’, as it were. They work hard to link disadvantaged Australians with financial services and products,” Collins said.

Collins said an evaluation report of the pilot scheme found that most of the personal loans were in the $1,000–$3,000 range for terms of 12 months to two years.

“These loans were used to pay for white-goods, cars, car repairs, medical expenses, household bills, develop micro-enterprises, and pay off debt, thereby creating a positive credit history,” Collins said.

“During the 15-month pilot period, $2,827,628 was loaned to low-income Australians. This comprised 1,053 personal loans and 122 microenterprise loans.

“At the end of the pilot, the majority of people were on track to repay their loans. Further, it was clear from feedback that people’s confidence and self-esteem grew from improving their credit worthiness and successfully making loan repayments.

“Almost 30 per cent of borrowers identified as Aboriginal or Torres Strait Islander. A third more women than men took out personal loans.”

The banks that have supported the pilot with loan capital, including the National Australia Bank, Westpac and Bendigo Bank.

The additional funding will be shared by four organisations:

  • Foresters Community Finance (Qld);
  • Community Sector Banking (NSW, with consortium partners operating in WA, Qld, Vic, SA, Tas);
  • Many Rivers Microfinance (NSW and WA);
  • Fair Loans Foundation (nationwide coverage through the web).

“These organisations involved in the scheme have shown a commitment to supporting vulnerable Australians,” Collins said.

“This initiative is not just about buying a new fridge or a new car.

“It’s also about giving thousands of Australians the chance to achieve their financial goals and learn essential financial skills, which has a positive impact now and into the future.”




Got a story to share?

Got a news tip or article idea for Pro Bono News? Or perhaps you would like to write an article and join a growing community of sector leaders sharing their thoughts and analysis with Pro Bono News readers?

Get in touch at news@probonoaustralia.com.au

Get more stories like this

FREE SOCIAL
SECTOR NEWS

Write a Reply or Comment

Your email address will not be published. Required fields are marked *



YOU MAY ALSO LIKE

Federal Govt Extends Advocacy Funding – States Called on to Follow Suit

Lina Caneva

Wednesday, 9th August 2017 at 4:02 pm

Government ‘Ideologically Opposed to Human Rights’ Says Departing Triggs

Lina Caneva

Wednesday, 26th July 2017 at 3:21 pm

Charities Send Govt Message to #FixFundraising

Wendy Williams

Wednesday, 5th April 2017 at 5:10 pm

Impact Investing Must Put Communities First, NFP Peak Says

Ellie Cooper

Tuesday, 28th February 2017 at 2:23 pm

POPULAR

Australians With Disability Twice as Likely to be Evicted Without Cause

Luke Michael

Wednesday, 5th December 2018 at 5:29 pm

Tech-for-good Companies Merge to Extend Impact

Maggie Coggan

Thursday, 29th November 2018 at 8:34 am

Glyn Davis Confirmed as New Head of the Ramsay Foundation

Maggie Coggan

Wednesday, 5th December 2018 at 6:00 pm

Putting Disability and Leadership in the Same Sentence

Maggie Coggan

Monday, 3rd December 2018 at 8:56 am

Nominate
pba inverse logo
Subscribe Twitter Facebook

Get the social sector's most essential news coverage. Delivered free to your inbox every Tuesday and Thursday morning.

You have Successfully Subscribed!