Media Release by Senator the Hon Kay Patterson

Interest Free Loan Schemes Continues

The Minister for Family and Community Services, Senator Kay Patterson, today announced that the popular Centrepay ‘No Interest Loan Scheme’ (NILS) pilot had been extended for an extra 12 months from 1 July 2004.

“The project has had significant success since beginning in November 2001 and I have extended it until 30 June 2005, so we can comprehensively evaluate its benefits and the positive impacts it has on people with low incomes,” Senator Patterson said.

“The 12 month extension will give NILS organisations the opportunity to develop the scheme further including building relationships with the corporate sector and attracting sponsorship.

“NILS helps Australians on low incomes to buy essential household items such as washing machines, fridges or furniture with most interest fee loans ranging from $500 to $1,000 repaid over eight to 15 months.

“Initially 13 organisations used Centrepay and some 1240 customers accessed the loan. The program has grown in popularity with the latest data now showing 73 organisations using the service and 3976 people benefitting from the interest free loans.

“The Australian Government will provide funding of around $180,000 over the coming year to cover the transaction fees associated with using Centrepay, allowing NILS organisations to continue operating under the current arrangements.

“This is good news for the more than 70 NILS organisations now operating throughout both metro and rural Australia and for their customers.

“It is important to note that the majority of the scheme’s customers would not have been able to buy essential goods without the financial assistance of a NILS loan.

“Customers gain a real sense of achievement when they are able to repay loans, resulting in improved self-esteem.

“As part of the loan application process, customers are given free financial management advice, which I believe is an important service for many of these people.

“Through the Centrepay fee waiver, the Australian Government has demonstrated yet again its commitment to assisting communities to help people from disadvantaged backgrounds, while at the same time helping them in developing both independence and self-reliance,” Senator Patterson said.