The Tasmanian Premier has announced that the NILS (No Interest Loans) Network of Tasmania will receive an increased investment of $1 million, including for subsidies for the purchase of energy efficient appliances such as heat pumps.
The funding will allow NILS Tasmania to increase its no interest loans output by at least 60 per cent for the next three years. In 2018/19, the NILS issued 2,519 Microfinance loans which enabled the purchase of close to $3 million of products and services in over 350 businesses across Tasmania.
John Hooper, CEO of NILS Network of Tasmania, said, “Today’s investment will enable NILS Tasmania to now aim for 4,000 loans per annum to disadvantaged Tasmanians which will enable $4 million in spending in Tasmanian business per year.
“Basically this $1 million will result in a direct spend of $4.5 million in Tasmanian retailers and businesses. We will provide safe affordable finance for people in financial hardship and provide a great boost to small and medium businesses all over Tasmania.”
Through this support NILS Tasmania also provides a 50 per cent subsidy on 2.5 star heat pumps and $300 off a three star energy rated fridge freezer or washing machine.
This means a heat pump that costs $3,000 installed, only requires the client to take out a no interest loan with NILS of $1,500.
“Already in the seven weeks of this financial year the government support has meant that NILS Tasmania has assisted 104 families to warm their homes with a brand new, half price heat pump. Our clients than pay back the loan at a maximum fortnightly repayment of just $40. No interest and no fees – ever,” said Mr Hooper.
Many Tasmanians are facing unemployment and financial strain. When people are experiencing disadvantage, they’re more vulnerable to poor financial decisions and particularly vulnerable to fringe lending – payday lenders and consumer leases – as a solution when they’re desperate.
The data from across Australia shows Payday loan use is growing most rapidly in Tasmania, with a growth rate of 15.5 per cent between January and July 2019, 18 per cent in 2017 and 16 per cent in 2018. These loans end with over 15 per cent of people stuck in a never ending debt spiral with many ending in bankruptcy, a situation which could be exacerbated by the current pandemic.
Stuart Foster, Chair of the NILS Tasmania Board and National General manager of Salvation Army Community Services, said, “We congratulate the Premier and the government on recognising the great value of NILS Tasmania as the safe financial alternative, and helping us to expand what we can do for financially vulnerable Tasmanians.”
NILS Tasmania is a not for profit community organisation established in 2002 which has issued more than 22,000 loans totalling more than $19 million dollars for household goods and services, as well as over 1,000 micro business loans to a value of $2.4 million.
NILS provides Loans from $300 to $1,500 to low income earners who qualify for a health care card to purchase essential household goods and services. There are no fees, no interest, and no charges.
NILS clients choose the product they want from their local supplier, the organisation purchases the item and the client pays it back at a maximum repayment of $40 a fortnight over 18 months (on a $1,500 loan).
The loans are delivered through a state-wide network of 65 delivery partner organisations including: the 34 Neighbourhood Houses; Anglicare; Salvation Army; City Missions. 383 trained volunteer Loan Officers provide the face-to-face component of the NILS Tasmania loan process in over 93 sites across Tasmania.
NILS purchases regularly from over 350 suppliers throughout Tasmania. In 2020 it “spent” close to $3 million dollars in appliance retailers, mechanics, dental surgeries and hardware stores in small and large communities across the state. The flow on economic benefit from the loans being spent in Tasmania is a significant by-product of NILS loans.