Tuesday, September 18, 2007

Interest free for people facing crisis

Adelaide Advertiser
Monday 17/9/2007 Page: 54 Section: Money
Region: Adelaide Circulation: 191,250 Type: Capital City Daily
Size: 84.12 sq.cms. Published: MTWTFS

Interest free for people facing crisis (ANTHONY KEANE) (Hat tip JK!)
INTEREST-FREE loans will be offered to people suffering from a financial crisis through a new program run by the Salvation Army and Savings & Loans Credit Union.
A 12-month pilot program will provide loans of up to $1000 to cover costs such as
whitegoods, medical equipment or supplies, hot water systems, funeral costs, and courses to improve employment prospects.
Strict eligibility criteria
- including willingness to participate in financial counselling will apply to the loans, which have an 18-month maximum term. Salvation Army divisional commander Major Dennis Rowe said financial difficulties could have "farreaching and devastating consequences".
"These loans will enable us to end the downward spiral and support these families
or individuals through a difficult period in their lives," he said. Savings & Loans is providing $50,000 for loans and $15,000 for financial counselling.
Chief executive Greg Connor said the program was part of the Adelaide-based
credit union's focus on corporate social responsibility.
"As a member owned organisation, we don't have the pressure to make big profits, which meanswe can focus on giving back to the community through programs such as this," Mr Connor said.

ok - so I'm thinking GREAT JOB! AND, why not more of it... how 'bout a national JUSTSalvo bank for the poor? just thinking outloud... and taking a page from Booth (over a century ago) and YUNUS (just the last few years modelling this in Bangladesh).


Anonymous said...

What about a system where you allow families to live rent free for a period of time? If there was no rent to pay people could save alot toward the purchase of a house. Why does it take 25yrs plus to pay off a house at over $1000 a month? Do the maths.. say a house costs 250 000 and 1000 is paid each month thats like 5 yrs of payments.. yet the bank loan goes on for 25 yrs.. so 20 yrs are interest??? even if you let the families have a 1 or 2 yr stay period it would drastically alter how much they could save in that time. Or what about a rent scheme where TSA buys the house and allows the family to pay it off. At the end of a set period, 5 or 7 or 10 yrs the house is sold, TSA gets profit from increase in value of property and the family gets rent money back to invest in own house. Doesnt even have to be a house, what about a mobile home park? (Can see the headlines now.. Salvos open commune, weekly meetings held onsite in tents.)

Simon said...

definately! Tony campolo and the organisations he works and partners with, have being doing micro-lending for a very long time and he swears by it! I think its a lot more effective and empowering than the welfare model of hand-outs.

You could even go one step further than a national JUSTSalvo bank - and help local communities setup their own banks -which people run and are responsible for - local community banks begin to model a totally different economic system based upon relationships not profit. One that is maybe more in tune with the new social order that Jesus initiated when he called the 12 disiples away from their socio-economic order of their day governed by empire- into smaller relational communities living out the kingdom of God - not reliant on the empire. now we're talking the economy of God (marcus curnow).
some thoughts...i dunno really!

Simon said...

hey anonymous great thoughts. Myself and another mate - Chris Warren have been talking about this idea for couple of years. it'd be the perfect idea for the salvos given the current housing crisis most of us work in and also live in aswell.

Instead of the salvo's sitting on money getting interest from unknown sources (do the salvo's invest ethically?) - could be doing something totally outside the box - doesn't make economic sense in today's world, but we're not meant to follow that economic order. We're to follow the economy of God. Jesus talks so much about economics hey.

Imagine that - freeing people from slavery! slavery of a 30 year mortgage - that would free up a whole lot more salvo's to spend time with their neighbours and work for justice rather than to pay banks owned by very rich people.

Anonymous said...

Anonymous... great idea, but suggest you check your figures. $250,000 @ $1,000 per month will not be paid off in 5 years. I think you meant $1,000 per week, but that is a huge commitment.

Fine tuning is all that's needed. Your idea is great, and I hope TSA can implement something like it.