It’s getting crowded on Struggle St as financial stress leaves nothing after bills for one in five Australians

    JESSICA IRVINE
    Mercury
    September 15, 2014



ONE in five Aussies rarely or never has anything left to put aside from their weekly income after paying bills, new polling reveals.      

Three-quarters of those in stress say they are forced to dig into savings to cover any unexpected expenses.

Two in five put any extras on a credit card.

One in six resort to pawning their possessions.

Medical or dental expenses are the most common unexpected expenses, followed by a higher-than-expected household or car repair bill.      

The polling was commissioned by NAB, which will today launch a campaign with Good Shepherd Microfinance aimed at opening the doors to traditional finance for people in stress, and helping them avoid becoming victims of payday lenders.

The figures reveal young people are the most likely to resort to payday lenders — who can charge punitive interest rates as high as 160 per cent — when in financial trouble.

One in 20 people aged 18 to 24 confessed to using a payday lender in times of trouble, compared to just one in 200 people aged 50-plus

Country people also experience higher levels of financial stress than city dwellers, the figures show.

Illness and divorce are two of the most common triggers for financial stress, Good Shepherd Microfinance chief executive Adam Mooney said.

“People who find themselves in difficult financial situations often seek quick fixes, such as selling their possessions or getting a high-cost payday loan. While satisfying the immediate need, these solutions can lead to bigger problems down the track.”      

Good Shepherd offers interest-free loans of between $300 and $1200 to people who meet certain criteria, including having a pension or health care card, living in their home for three months or more and who can demonstrate a capacity to repay over 12 to 18 months.

Incoming repayments from participants are used to extend finance to others.

NAB boss Andrew Thorburn rejected the idea the mainstream banking system is closed to those in financial trouble.

NAB offers microfinance to small business and a monthly fee-free transaction account.

Maybe the banks can get into human trafficking after they have stripped the wretches of all their possessions. They can sell the customer to pay off the debt.

True Blue... wrote on Sep 26^th, 2014 at 7:19am: