The No Interest Loan Scheme (NILS) - Credit Provider of Choice for the Destitute

People surviving on Centrelink income support payments, as well as those earning under $35,000 per annum from employment, have almost no access to commercial credit products and loans.

This is due to the following main reasons:

• Perceived lack of servicing capacity – that is, the lender's negative perception about the prospective borrower’s financial capacity to keep up with repayments;

• Perceived poor character - that is, the lender's negative perception about the prospective borrower's creditworthiness and ethical behaviour (this is so even in the presence of strong evidence to the contrary, such as an impeccable past credit history);

• Therefore, most lenders do not consider Centrelink income support payments to be “income” for the purposes of assessing commercial loan applications.
  

The effect of this is to leave the most vulnerable in our society utterly without the means to fund

the purchase, repair or replacement of

essential household items such as whitegoods, car expenses, medical costs, education costs, essential technology such as a laptop or smartphone, or housing costs like a rental bond.

These items are all things that have the potential to provide an immediate improvement to an individual or household’s standard of living and / or to provide a pathway out of poverty in the long term.

The answer is interest-free micro finance.

The No Interest Loans Scheme (NILS) is a government funded, zero interest loan product to assist low income Australian households to purchase certain essential goods and services when they don’t have access to savings or commercial credit products to fund those purchases in the short term.

It’s the credit provider of choice for those who are so destitute that they have no other choices.

Although funded by the Australian government, NILS is managed at a national level by Good Shepherd Australia New Zealand – an Australian registered charity and deductible gift recipient - which is part of the Good Shepherd Network (a network of not-for-profit and charitable organisations of Roman Catholic origin, operating in 73 countries globally).

The Good Shepherd website, which can be found here, is the first port of call for anyone wishing to enquire about or apply for a NILS loan. On their website you will find information about what NILS is, the eligibility criteria, the types of goods and services that can be purchased using NILS funding, the application process, documentation required to lodge an application and how to apply.

Good Shepherd doesn’t administer individual loan applications directly, but rather uses a network of agents, known as providers, in the not-for-profit sector. These are typically organisations like The Salvation Army, which are already operating in and providing other outreach services in the area - although which specific organisation(s) provide NILS services in given area varies from town to town.

You can find the NILS providers in your area by using the search tool on the Good Shepherd’s website. Your next step in applying for a NILS loan is then to select one of the providers near you and to contact them directly.

Repayments on NILS loans are made via Centrepay, if you receive payments from Centrelink, or alternatively via direct deposit if you do not receive Centrelink payments.

Centrepay is a system whereby you can authorise payments to certain third parties to be direct debited from your fortnightly Centrelink social security payment at Centrelink; Centrelink then forwards the balance of your social security payment, net of Centrepay deductions, to your bank account.

You can apply for a NILS loan even if you already have another NILS loan, provided that your total NILS borrowings are under the maximum applicable threshold.

You can also apply for a NILS loan if you are receiving Centrelink payments but aren’t eligible for a Centrelink Crisis Payment, or you aren’t eligible for a Centrelink Advance Payment (eg. due to having already received an Advance Payment within the last 12 months, or because you are still paying off an Advance Payment that you received more than 12 months ago). You may also be able to borrow more via a NILS loan than via a Centrelink Advance Payment, depending on your specific circumstances.

In any case, none of those options are actually mutually exclusive. ie. You can receive a Centrelink Crisis Payment and an Advance Payment and qualify for one or more NILS loans all at the same time, as long as you meet the eligibility criteria for each.

Remember:

If your wallet is having a bad day,

it’s NILS all the way!