Dr. Amie Lajoie:

Our recommendation on the interest-free loans was rooted in the kind of approach MABS would take to financial inclusion itself and understanding financial inclusion as having to do with access to sufficient income, levels of financial literacy, that level of community engagement and, really importantly, access to appropriate financial services that suit the needs of our clients and people who tend to be lower-income or are struggling.

On interest-free loans, much work has been done in the past by MABS. It was before my time but something I looked at before joining. It included looking at the likes of community banking schemes or saving initiatives rooted in the community to give people an opportunity to access, or to become familiar with different skills within the remit of financial literacy that are suitable to them, versus trying to get people into the services that currently exist. There initiatives out there. For example, members may have heard of the It Makes Sense loan scheme with credit unions or the personal micro credit scheme. That is an affordable credit option that was rolled out I think around seven years and that is still being incorporated in different areas of the country. That is a low-level interest rate of about 12.5% for people who are on social welfare, so they can access that. However, there are a number of problems. On the way credit works in general, as Deputy Doherty and Senator Higgins said, our whole financial system is set up in a way that banks do not offer the type of credit or loans people on low incomes need. They would be short-term, low-level loans for amounts that are usually for not very high amounts that people can access immediately and that are inexpensive. It tends to be that the less you borrow, the more you must pay back in interest, compound interest and all that. That is where that recommendation comes from, that is, when we see a spend like this. These services are not elective for many people. It is very much a necessity that the person adapts his or her home to better meet his or her needs as a person with disabilities who has specific needs.

It would be quite helpful if those types of loans were available. Something like that, which could be backed up by a broader public initiative and local authorities, would be useful, particularly for the more marginalised groups.