Launching the Northern Rivers No Interest Loan Scheme (NILS) were Paul Cruikshank, Corrina Proske and Amitha Pathirana.
Launching the Northern Rivers No Interest Loan Scheme (NILS) were Paul Cruikshank, Corrina Proske and Amitha Pathirana.

A leg up to those in need

No it’s not a Nigerian email scam; you can actually get free money from the bank.

The No Interest Loan Scheme (NILS) is a scheme that has been operated by the Good Shepard Youth and Family Service in Melbourne since 1981 that allows people on low incomes to access interest free loans. On Monday, Page MP Janelle Saffin officially launched the Northern Rivers NILS, the first time the scheme has been available in regional NSW.

Loans of $500 to $1200 will be available to purchase essential items like a fridge or a washing machine, or for car registration. The loan is then repaid fortnightly over a period of 10 to 18 months, depending on the borrower’s circumstances. To be eligible, borrowers need to meet the income criteria, be in stable housing and able to budget for the repayments.

The idea of NILS is to give people a chance to get ahead, but that it is not a handout and comes with responsibility.

The scheme was the idea of a Good Shepherd social worker in Collingwood who was working with women leaving domestic violence situations. He managed to convince senior managers that the women would pay the money back, and over the years the scheme has grown from one worker administering $15,000 to a national network with access to $15 million in funds.

Over the next 12 months another 50 NILS outlets are expected to be opened.

Traditionally low income earners have been considered to be a ‘high risk’ group when applying for credit and often charged interest as high as 30% to cover the risk of defaulting. But what NILS and other micro financing programs have shown over the years is that they are actually a low credit risk, with a default rate of less than 2%.

The National Australia Bank has now given NILS another substantial boost by introducing a system of matching the savings made by people once they have paid off their loan. The AddUp scheme works like this; once somebody has paid off their NILS loan, they can choose to continue to pay the same fortnightly amount into a NAB AddUp account. When they reach $300, NAB will match it (up to a maximum of $500).

Paul Spooner, who is the manager of the Byron Community Centre, said he was the recipient of a NILS loan in 1994 when he and his partner came back from travelling around India.

“We came back with no money and our tail between our legs and were living on the floor of this apartment in Fremantle for about three months before I went and got a loan for a little bar fridge to put food in. Before that we lived without a fridge and had to just buy enough food for two or three days before it went off.

“The great thing about it (NILS) is that I didn’t feel belittled by the process. No-one was judging me, I was able to keep my dignity,” he said.

Corrina Proske from National Australia Bank’s microfinance program said NILS was “the country’s best kept secret”.

“I came across it seven years ago and was amazed by the simplicity of the model. Bankers get it – lending money is core to what we do, but (at first) they didn’t get the thing about dignity.

“Most of us are only two pay checks away from not being able to meet our debt obligations.

“This scheme is about those who have the least not having to pay the most,” she said.

Michelle Sainsbury from Good Shepherd, who came up for the launch said, “it’s not just about buying one item, it’s about the power to plan.”

Northern Rivers NILS will operate from the Lismore Neighbourhood Centre and the Byron Bay Community Centre, as well as TAFE colleges in Wollongbar, Lismore and Grafton.


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