Community Scoop » Zero-interest loans are changing the lives of struggling New Zealanders

Press release – Nga Tangata Microfinance Trust

Ng Tngata Microfinance Trust (NTMT) today announces a milestone. Since the charity was founded in 2009, it has provided 1,000 interest-free, no-cost loans, helping low-income New Zealanders escape unmanageable debt and get…

Ngā Tāngata Microfinance Trust (NTMT) today announces an important milestone. Since the charity’s inception in 2009, it has provided 1,000 interest-free and cost-free loans, helping low-income New Zealanders escape unmanageable debt and earn money.

Ngā Tāngata Microfinance Trust “recycled” Kiwibank’s $500,000 capital to provide $2.5 million in community loans, with a remarkable repayment rate of 94%. NTMT punches well above its weight when it comes to social return on investment, generating a return of $3.60 for every dollar spent.[1]

“Each of these loans has helped low-income New Zealanders and their whānau earn money, enabling them to pay off debt or buy the essentials they need. Above all, working with a financial mentor means our borrowers learn how to manage their money in the future,” says CEO Natalie Vincent.

“Our zero-interest, no-fee loans have a multiplier effect. These loans help break the cycle of poverty and debt problems and improve the financial well-being of the loan recipient and their family for generations to come,” she says.

Fairer, sweeter loans that reduce debt and improve lives

NTMT’s fairer and more generous loans go to the “poorest of the poor” in New Zealand. 75% of our clients are in the lowest income quintile and struggling to live on a family income of less than $36,000 a year, with many trying to survive on as little as $25,000 a year. [2]

NTMT customers are six times more likely to struggle to pay basic living expensessuch as food and accommodation, compared to the average New Zealander. [2] Yet, despite this, two out of three customers, since repaying their NTMT loan, have no longer borrowed money for living expenses. This demonstrates the power of safe and fair credit and financial mentoring.

A recent survey also shows that clients who have finished repaying an NTMT loan are more confident in managing their debts, [3] and more careful when making financial decisions. [4] And 100% of customers agree that their NTMT loan helped them achieve their goals. [5]

“When you provide fair and equitable loans that people can afford to repay, coupled with ongoing support, they are motivated and able to improve their financial stability,” says Vincent. “Our interest-free, no-fee loans, combined with working with a financial mentor, empower our low-income people to build financial capability.”

NTMT loan seekers should work with a financial mentor to build their financial skills and well-being. This comprehensive approach helps low-income New Zealanders develop financial stability and financial literacy, improve personal effectiveness and avoid predatory high-interest lenders.

“A loan from Ngā Tāngata Microfinance can be part of the solution for lifting people out of poverty. These loans play a vital role in the broader fight for social justice outcomes in New Zealand,” says Vincent.

More investment needed to reduce poverty levels in New Zealand

NTMT’s track record also demonstrates the benefits of multiple organizations working together to reduce poverty in New Zealand. NTMT partners with Kiwibank, the Ministry of Social Development and FinCap, and has the support of several charities and trusts. NTMT is always seeking additional investment to enable us to provide more equitable financial options to communities in need.

“Last year’s lockdowns followed by this year’s spike in inflation rates mean low-income New Zealanders are in real trouble,” says Vincent. “We would be very happy to receive donations and corporate sponsorships from individuals and organizations who share our vision of a fairer New Zealand for our most vulnerable citizens.”

“Investing as a country to empower people to be more financially literate is key to achieving longer-term results,” she says. “When we lift people out of poverty, we also improve mental health, reduce family violence, risky behaviors, addictions and child care, and reduce reliance on emergency benefits.”

“Our loans are absolutely making a difference, helping people in dire straits reduce costly debt, access financial mentors and learn how to manage their money. But a lot more investment is needed.

1 ImpactLab GoodMeasure Report – Ngā Tāngata Microfinance, September 2021

2 Compared to September 2020 New Zealand Household Health Survey results

3 Compared to the results of the New Zealand Financial Capability Survey 2021

4 Compared to the results of the New Zealand Financial Capability Survey 2021

5 Results of a telephone survey of 55 NTM survey participants in May/June 2022

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Garland K. Long