Microfinance
Microfinance is the provision of banking services to customers that lack access to traditional financial services, usually because of poverty.
It is called microfinance because loans are usually below $5000 and interest rates are 0% or very low.
Microfinance loans can be difficult to access as the eligibility can be very precise. Eligibility may include:
- the demographic that can access the loan e.g. Māori, beneficiary, within a certain location
- what the loan can be used for e.g. household items, education
- when the loan must be repaid by
- maximum amount that can be applied for
- upper income level.
Many have a requirement that the client be working with a financial mentor for at least six months or longer.
It is difficult to find providers of microfinance as many are local community groups and churches. You will, therefore, need to talk to your budget service to determine what if any microfinance providers are available to your clients.
Good Shepherd have collated and do provide a list of microfinance providers in each regional area in New Zealand.
Nga Tangata are another organisation that offer small, safer, interest-free loans.
https://www.ngatangatamicrofinance.org.nz/
