A new initiative from The Salvation Army aims to reform the damaging effects of problem debt and fringe lending in low socio-economic areas across New Zealand by providing an ethical shopping alternative.
In a bid to curb unethical lending in our most vulnerable areas, The Salvation Army will launch a new shopping truck in South Auckland on Tuesday 19th February.
The Good Shop is a roving truck offering vulnerable consumers access to honest financial advice and quality goods at no interest—a stark contrast to the 800 per cent terms that The Salvation Army has seen in some mobile lending operators’ contracts.
The predatory lending industry is booming, growing 39 per cent or by $1.5 billion in the past five years1. With multiple reports about unscrupulous lenders and following Prime Minister Jacinda Ardern’s 2018 announcement to regulate and place an interest cap on non-bank loans, The Salvation Army says its decision to invest time and resource on an innovative ethical option will bring solutions directly to people and offer financial literacy advice.
“We knew we needed to start reform now. Every day we see people trapped in a cycle of debt by these loans, with no other options open to them and often with limited economic understanding. The Good Shop will positively disrupt the current mobile trading business model that can have extortionately high-interest rates and repayment plans that exploit our people,” The Good Shop Project Manager Jodi Hoare says.
“The Good Shop will provide a safe alternative solution to people who may struggle with transport, are unable to make upfront payments or cannot obtain credit from mainstream stores to purchase what they need.
This initiative wouldn’t have been possible without the delivery partners The Warehouse Group, BNZ and Countdown, and additional financial support from the Ministry of Social Development, The Tindall Foundation and Nikau Foundation,” Mrs Hoare says.
“Not only will the initiative bring fair and ethical credit directly to the streets, it will also increase public exposure to financial education and undo some of the damage that has been done by predatory loan services in the community.”
Essential household items such as food, furniture, electronics, appliances, whiteware and baby items will be available via online shopping technology on board the truck. Salvation Army workers will be on hand to assist clients plus provide referrals to other services and welfare that may benefit them, including budgeting advice.
Through The Good Shop, consumers will be able to access The Salvation Army’s interest-free loans supported by BNZ and Good Shepherd NZ to buy cost and energy-efficient items at competitive prices from The Warehouse, Noel Leeming and Warehouse Stationery plus grocery items from Countdown. Credit will not be extended to groceries given it is an ongoing consumable expense, however supporting people to access food at standard supermarket prices is a key role of The Good Shop.
“Thanks to the generosity of our partners, a significant number of people in need have an opportunity to avoid the problem debt cycle as we start to build financial capability in these communities,” says Hoare.
The Salvation Army plans to roll out the initiative across more communities with high deprivation and where The Army currently has a strong presence providing social services, with a second vehicle already planned for Wellington in mid-2019.
Hayley Urry, Undertow Media, 021 766 864, email@example.com
Sarah Carty, Undertow Media, 020 4173 5225, firstname.lastname@example.org