Labour Looks To Turn Families Away from Loan Sharks

May 13, 2013 New Zealand Finance

Labour is looking to provide low income households with low cost capital in situation which would normally require families turning to costly commercial lenders.

More New Zealand families could be financially independent if a new system of no-interest loans was enacted in New Zealand, according to the Labour Party, in a press release issued on May 13th.

The Labour Party is proposing that the a “social lending scheme” be instated as a private-public partnership, which would provide New Zealand families with low cost loans, with the main goal of providing a public benefit and not to draw a profit from the lending.

The Consumer Affairs spokesperson for the Labour Party Carol Beaumont explained that the loans could be used by families when faced with an unexpected and unaffordable expense, compared to the current situation where the family would be forced to take on costly debt from “dodgy lenders”.

Under the plan currently created by the Labour party, capital contributions for the system could be provided by local banks, while the government and local community groups could provide local budgeting and organisation.

Carol Beaumont suggested that investigations conducted by the labour Party show that there is an appetite for philanthropic lending on the current market, which could be satisfied through the suggested lending scheme.

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