Broadcast Date: January 08, 2008
As families sink to record levels of household debt and bankruptcy while credit default rates skyrocket, struggling Australian communities are seeing the emergence of financial white knights handing out free loans.
Belinda Drew heads up the non-profit organisation Foresters ANA, which assists communities to establish loan circles and other no-interest loan schemes as an alternative to controversial high-interest loans also known as pay-day loans.
"[People] know they're not going to get done over ... they're not going to be exploited and they are not going to be judged either and that's really important to people," Belinda said.
"All you have to do is join a local circle, put in $10 a month and after six months you can borrow money in times of need."
Mother-of-five Kerry Deller is a case study in financial salvation, rescued by a lending scheme that required nothing more from her than what she borrowed.
"I found myself single after 20 years of marriage and I had five children and it was something that I hadn't planned for in any way shape or form," she said.
Surviving on welfare, Kerry was about to abandon a university degree.
"The car had broken down and I had raked every cent together to get my car back," Kerry said.
"Without the car I couldn't go to uni and I just didn't know where to go or what to do, and out of the blue I got this phone call."
The call was from a so-called community savings and loan circle, Foresters ANA.
Sydney father Mervyn Peka has used several no-interest loans to pay for household needs but he said the most important gift the companies have given is the ability to educate his children.
In just the first three months of this year, more than 6500 Australians applied for bankruptcy and across the nation, credit default rates soared.
The worst state, Tasmania, suffered an almost 60 per cent increase.
In the Northern Territory, the rate jumped by almost 50 per cent.
It was a similar story in Western Australia, Queensland and New South Wales.
Victoria had the best rate with just a 10 per cent increase.
Community loans are available in most capital cities and are generally for smaller amounts for cars and household bills.
Foresters ANA can be contacted to find out if there are branches in your area.
"There's enormous power in people coming together to help themselves," Belinda Drew said.
Contact Foresters ANA Mutual Society Ltd.
Tel: (07) 3210 6772
(Credit: Channel Seven)