Like many countries, Australia is facing a difficult economic situation.
Inflation rates are hovering at a 30-year high, while supply chain disruptions and housing shortages are compounding an already challenging economy.
For Australian families struggling with essential household purchases, a 40-year-old program begun by religious sisters in Melbourne offers one option for relief.
The No Interest Loan Scheme (NILS) provides loans without any interest or fees — typically up to 2,000 Australian dollars [$1,336 USD].
The interest-free loans can be used for a wide range of “essential goods and services,” which include home appliances and furniture, medical equipment and appointment costs, course fees, job supplies, driving lessons and car expenses, and technology such as a phone or computer.
The loans are generally available to individuals making less than AU$70,000 per year or families making less than AU$100,000 per year.
The program was started by the Melbourne-based Good Shepherd Sisters in 1981. The sisters later entered into partnerships with other religious congregations, including the Sisters of St. Joseph.
The program is now available to low-income residents throughout the entirety of Australia, as well as New Zealand.
Anita Van Dartel is the team leader at Mary MacKillop Today, a ministry of the Sisters of Saint Joseph, which is one of the community organizations that helps administer the NILS loans.
The Pillar spoke with Van Dartel about the history of NILS, the practicalities of setting up repayment plans, and how the program helps recognize the dignity of the clients it serves.
The interview has been edited for length and clarity.
What is the economic situation in Australia, and how is it affecting the average citizen?
With the downturn in the economic situation here in Australia, the need has grown, particularly in the last couple of months.
Normally we see people that are on Centrelink [government] income. In the last three or four months, there's been an increase in families with a more typical income, because they're struggling to pay for food, or their mortgage interest rates here have gone up constantly for all this year. So things that they could easily have money for - registration or car repairs - that money's not readily available because they're trying to stay on top of things to pay their mortgage.
Energy bills are also a big thing. Energy bills have gone up a lot.
One thing I've seen a lot of this year, and this is the first time in probably five years, is that a lot of our clients are getting into rent arrears because there's a high demand for renting homes. So all these landlords have raised their rents, and these clients are struggling. They've been in these houses 10-15 years and they're struggling to pay.
The NILS program has a community circular credit model - when money is repaid, it is then available for someone else to borrow.
Where did the money come from in the first place, and how much money is available for people to borrow?
When the sisters started, it was donations. They started with 100 bucks to start loans. Things were a lot cheaper then, but that's how it started.
Now we have funding from state and federal government as well. People can borrow up to AU$2,000, and that's usually payable back in 12 months.
We have domestic violence loans as well, and they're up to AU$3,000, and they can pay them back in about 18 months.
We’re one out of a heap of providers in Australia that do the NILs loans. In the last 12 months, there's been 954 loans administered, just by us…It's quite flooring when you actually look at it.
There’s an expansive list of purchases that qualify for a NILS loan – anything from dental work to a phone to moving costs. But you don’t offer NILS loans for rent or utilities or food. Why is that?
For food, there's a lot of other community organizations that can help in that area. And because it's perishable, I think we would struggle for people to repay.
We don't do bills because the debt has already been incurred. That’s just part of the policy for NILS throughout Australia.
A rent arrears - if there's a one-off reason - we can do that. We do bond as well. I think as the need grows, the program morphs to what the demand is.
With electricity, we can actually help with EAPA (Energy Accounts Payment Assistance) vouchers that are administered through the state government. So we don't need to help them pay their electricity because we actually have other means to do it.
In addition to a broad range of household necessities, NILS loans can be used to cover things like a TV, which are not exactly essential. What is the thinking behind that? Does it just speak to human dignity and the ability to have some comforts in life?
Oh, definitely. Comfort, being able to relax, have a nice home.
That word “dignity” is something that comes into our everyday thinking. And that looks different for everyone. And with mental health, someone's dignity or someone's survival may be a TV. That's not our place to judge that. That can look different for different people, but that is a word that we actually use a lot when we do what we do.
What happens if someone doesn't pay back the money?
There’s a process that we go through to try to encourage them. We reach out, we talk, whatever.
And there's just some people that are just not going to pay, but I would have to say majority try to pay, even if that looks different, it takes them longer. And we can negotiate with them to do a smaller amount for repayment. If we have to reduce that to enable them to then pay the bill in full, that's what we do.
A lot of people that are enduring hardship or financial stress, their situation can change momentarily. We've dealt with so much homelessness of late, which has been probably in the last 18 months as well. These people are living in their cars, so we have to do exemptions so that they can get these cars registered or repaired [without a physical address]. So again, the program does change towards the needs in the community.
What happens if a loan applicant gets declined?
There's very few that get declined. They have to be in quite a state. We try to work with them to get them the tools or get them the stuff that they need to be able to apply for this loan, but that can look different for everyone.
When we get a client in, we can actually advocate for them, for whatever’s going on in their life.
That can look like ringing the energy company and putting a payment plan in place. You’ve got a lot of payday lenders, they take advantage of these clients because they're very, very desperate. So we advocate for the client and put a payment plan in place that the client can actually afford.
We’re lucky enough, too, to have a financial counselor in-house, and they can get much better results from bigger companies.
Advocation for any client can look in any different way, but we are actually paid by the Department of Fair Trading to advocate for clients when they come in to get a NILS loan.
What else do you offer for your clients, besides the NILS loans?
We deliver free education, either one-on-ones or in groups, and we tailor-make it to any group. We’ve started that in the last three years, these free educations.
We teach [people] how to shop, [create a] shopping list. This all sounds very basic to yourself and me, but a lot of people have not been given those skills. To cook meals that are economical, efficient to their budget, how to read a bill. A lot of people don't know how to read an electricity bill or a power bill or a gas bill to even know their daily usage and how much they should be paying.
We teach a seniors’ group about scams and what the steps are to save themselves [from a scam] or to recoup money. We do basic things, just making people think about needs and wants, and what we have to buy. We get them to diarize what they've spent money on and just reflect - not telling them exactly what they should and shouldn't be doing, but try to empower them.
We do what they call EAPA (Energy Accounts Payment Assistance) vouchers - clients can apply for them twice a year for up to AU$400 each time to be taken off their energy bill. That is administered through the New South Wales government, but we actually help with that.
What kind of feedback have you gotten? Have people shared with you the difference that you've been able to make in their lives?
Overall, people are very, very grateful and they have a good experience and they refer us to their family, their friends, and a lot of how we’ve grown has been word-of-mouth.
As you know with anything, there's good and bad, but [mainly] they are very grateful.
To have their car registered and on the road and fixed - we don't have extensive public transport or anything like that.
To have a running fridge - the fridge breaks down and we have new fridges delivered to them, and part of it is they get installed and all that sort of stuff. You've got elderly people that can't go without that.
Or curtains. To have thermal curtains to reduce their heating and cooling bills.
We're all quite humbled to be able to do this. And when you get a really good win for clients, it's awesome.
I just think that we are lucky. Very lucky. And proud, I think we all are, of what we do. That's not every job, is it?