a life journey - Good Shepherd Microfinancegoodshepherdmicrofinance.org.au/assets/files/2016/... · For all of us, life is a journey. The path is often not clear and is challenging

a life changing journey

2 0 1 4 A N N UA L R E P O RT

Contents

About us 3

Mapping microfinance 10

Growing programs 12

Focusing on people 26

Strengthening governance 31

Financials 36

Photo: Sally Levy, NILS Quality Assurance Officer, Good Shepherd Microfinance, with her four year old daughter2

Good Shepherd Microfinance

Values

Human dignity, respect, social justice, audacity, compassion and reconciliation.

Strategic priorities

To enable economic wellbeing and resilience for people on low incomes, especially women and girls.

Purpose

About us

Vision

Fullness of life for all people, living in connected resilient communities.

Reach InformImpact StrengthCommunity–led

Good Shepherd Microfinance is Australia’s largest microfinance organisation. We offer a range of people-centred, affordable financial programs for people on low incomes at different financial stages of their lives.

Our aim, together with those of our community partners, is to enable clients to realise their own economic wellbeing, as they define it themselves, through appropriate financial services. As a result, people feel valued, accepted, included and in control of their own finances and lives.

3

Annual Report 2014

A Message from our Chair

For all of us, life is a journey. The path is often not clear and is challenging and rewarding. The stories of hope and courage that hundreds of microfinance clients and workers have shared with me, are inspiring and have been life changing, for the clients and myself. Each story shows that personal and family resilience and control is being built every day. Inclusive finance plays an essential role in this. Dreams are realised. Confidence is boosted. People are connected and valued. Families are moving towards economic stability and strength. We are all better off when this happens.

Good Shepherd Microfinance was established

in 2012 to give focus and increase the reach

and impact of microfinance in Australia. The

Good Shepherd Sisters began the No Interest

Loan Scheme (NILS) in 1981 to enable primarily

women on low incomes to take out small loans

with dignity on fair terms to buy essential items.

This approach has confounded the sceptics

with around 97 per cent of all loan capital

repaid and over 155,000 people and families

achieving real economic mobility - moving

away from crisis and hardship, towards stability,

income generation and longer term resilience.

This was the first year of ‘Count Me In’, our audacious strategy for 2013-2018. Reflecting on our activities and performance gives the Board confidence that we have strong foundations and governance in place and are on track to achieve our longer term goals.

Our Finance and Audit Committee is chaired by Ian Clyde and includes Director Vinita Godinho and Daniel Rudd from Ernst and Young. The Board greatly values the role and activities of the Committee in giving confidence in our financial governance and reporting.

Our primary partner NAB has joined with us to reach at least one million people by 2018, with initiatives well underway. Our 260 valued microfinance provider partners are

highly capable and engaged and reaching more people than ever, through informed local experience. Our programs are well and truly having profoundly positive social, health and economic impact at the household level. This is accompanied by a compelling national economic case to extend investment in inclusive finance from clear evidence that our programs contribute directly to economic growth.

The Murray Financial System Inquiry in Australia provides a once in a generation opportunity to divert policy and investment focus to inclusive finance. Rather than being trapped in endless cycles of expensive debt through widely available and predatory fringe lenders, vulnerable people can increasingly access fair and appropriate financial services when they need it and can afford it through our programs - in short, stopping small problems getting big.

Our important work has been strengthened by the welcome addition of four substantial corporate partners this year. Trusted retailer The Good Guys, insurers Suncorp Group and Insurance Australia Group and leading ad agency Clemenger BBDO, join our primary partner NAB in committing long term to realising financial inclusion in Australia. The Australian and state governments have also shown inspiring commitment by working alongside us to increase investment and being willing to co-create solutions and innovations.

Finally, I thank my fellow Directors on the Board for their time, energy, wisdom and insights. All of this is offered so generously and positively in the knowledge that together with others, we are all making the places we live in more inclusive, connected and resilient communities with a heart.

Dr Christine Nixon APM

Chairperson

4


‘I am a business owner - to be that and to feel that, suddenly you have worth and can go forward.’ These moving words, from microfinance client Kay, show what is possible when someone sees your strengths and believes in you.

Good Shepherd Microfinance programs have already enabled over a million conversations like this. Local microfinance workers like Lynne, who earned the trust and respect of Kay, at BaptistCare’s Warilla North Community Centre in 2014, are unsung heroes who care about where they live.

More than 1,300 skilled community leaders, often volunteers from all over Australia and now New Zealand, are accessing microfinance loans, savings, energy and insurance programs every day to positively change the lives of people on low incomes.

Evaluations of each Good Shepherd Microfinance program show that we are having positive impact, as described by our clients. Four out of five clients are moving away from crisis and hardship towards stability and resilience - achieving economic mobility. Four out of five clients that have used payday lenders in the past have stopped using them since accessing our programs. We are effectively reaching our target market with 94 per cent of clients living in poverty, of which 68 per cent are women and 22 per cent are Aboriginal people. And, we are reaching more people than ever before – 28,093 direct clients. This takes our total clients reached to over 155,000 – people who have accessed financial services that strengthen lives.

Yet we are only reaching six per cent of those that need fair, safe and affordable financial services. Three million adults in Australia, 17 per cent, are financially excluded and unable to access the basic financial products they need. At a client and household level, we know there are positive benefits. Now, thanks to leading economic modelling by Strategic Project Partners that we commissioned, we know that there is a compelling national economic case for expanded investment in inclusive finance. Gross Domestic Product (GDP) would increase

by $20 billion, net of investment, if we can extend the reach of microfinance to meet demand.

We have made good progress in the first year against our Count Me In priorities for 2013-2018. Our 260 provider partners are highly engaged, capable and more connected, after investments in learning and development, quality assurance and program promotion. NILS and StepUP are now in New Zealand. Good Money stores have reached over 10,000 people in Victoria and are extending to South Australia and New South Wales. Our people have almost the highest staff engagement of any organisation in Australia and find real meaning in their work.

Our future focus will be on investing heavily in our existing programs to more fully connect with clients. We will also use technology to build new options for digitally proficient clients to deepen our product and channel offering. Insurance, enterprise development, energy inclusion, financial capability and advisory services will feature as new programs.

Our partnership with NAB goes from strength to strength on a shared commitment to realise financial inclusion and reaching one million people from 2013 to 2018. Our innovative Australian Government contract has enabled great progress in reach and impact and is to be extended in July 2015.

Finally I’d like to thank our team for their courage, resolve and belief in our mission and for enabling life changing journeys to be real and possible.

A Message from our CEO

Adam Mooney

Chief Executive Officer

5

Annual Report 2014

More than 33 years ago, the Sisters of Good Shepherd had the foresight to establish the first micro loan program, lending $20,000 of their own money within the local community.

The creation of the No Interest Loan Scheme (NILS) was inspired by a problem that case workers were reporting at the time through contact with women leaving domestic violence.

Increasingly, they were finding that lack of access to funds for essential household items was a major impediment to people breaking out of hardship.

This was Good Shepherd’s answer:

f Make money available as a loan, not as charity

f Show respect for clients by entering into a professional valued relationship – a formal loan agreement

f Educate clients to negotiate a loan and, importantly, create a system that makes it very easy for them to pay it back

f Charge no interest and ask people to return the money so their friends and neighbours can also benefit.

This innovative model holds true today and is founded on trust. With 97 per cent of NILS loans being repaid in full – we know that this model works. In recent years, additional financial products and services have been added to our suite of programs with a focus on responding to the specific needs of people on low incomes. 1981

2004

2006

2009

2011

2012

2013

2014

NILS launched in Collingwood

StepUP launched in partnership with NAB

f Inaugural National NILS Conference in Sydney

f NAB announced $10 million capital commitment to NILS

f AddsUP matched savings launched

f Australian Government invests to extend NILS and StepUP

f NAB announced $130 million commitment to microfinance capital

NILS celebrated 30 years

f Good Shepherd Microfinance established

f Good Money, energy inclusion and Aboriginal financial inclusion programs established

f Australian Government funded extension of NILS and StepUP

f Remote NILS launched

f Partnership announced with The Good Guys

f Cout Me In strategy – commenced to reach 1 million people

Good Insurance partnership announced with Suncorp Group and Insurance Australia Group

A worthwhile journey

6


This year’s highlights

Two MoneySmart Awards:

Impact Measurement Award from Social Impact

Measurement Network Australia (SIMNA) for StepUP

Bank of New Zealand committed $10m

towards microfinance programs in New Zealand

New insurance partnership launched with Suncorp Group

and IAG

NILS clients experienced improved economic outcomes

Highest number of loans delivered in a financial year

Included in Philanthropy

Australia’s Top 10 Charities

TOP 10

Highly Commended Award for Good Money

Highly Commended Award for ‘Microfinance, Inclusion and Economic Growth Research Report’

26,906 loans 88%82%

Launched Good Learning education platform

Good Money celebrates reaching 10,000 people

organisational engagement

‘Life changing loans at no interest’ report released

Reconciliation Action Plan (RAP) launched

Together with NAB we have

reached 145,000 people through

microfinance products since 2005

145,000

7

Annual Report 2014

Priorities Key activities

Support clients to define their own economic wellbeing and then apply individual and community strengths to realise that wellbeing.

In May we released ‘Life Changing Loans at No Interest’, the outcomes of the NILS program. It confirmed the positive impact of NILS, providing key insights into ways to increase our reach.

Support the provider network to deliver products, services and resources that are effective, efficient and in demand.

The annual Provider Survey reported satisfaction up from 79 to 83 per cent. Survey results and an action plan were shared at 2014 National NILS Conference.

Influence financial system reform enabling equity, access and economic inclusion.

We continue to engage with governments, policy makers and industry to influence financial system reform. We made two submissions to the Financial System Inquiry.


Provide alternative people-centred financial services to large numbers of people.

We set ourselves the stretch target of reaching 28,150 clients. We reached 28,093 clients through NILS, StepUP, AddsUP and Debt Deduct.

Increase physical locations and awareness and virtual footprint through marketing and communications.

As at 30 June 2014, there were 260 local providers in 669 locations nationally. We also continued to operate three Good Money stores in Victoria, with funding from the South Australian Government for a new store in Adelaide. We reached more than 85,000 people via our website and social media communications.

Provide a range of no-cost, break even and self-sustaining programs and clearly define target market criteria and channels.

Work has commenced to scope out a new sustainable program for 2015 which will significantly increase our reach.

Source and deliver essential products and programs - lending, saving, transacting, insurance, microenterprise, asset building.

We’ve established corporate community partnerships with Suncorp Group and IAG committed to developing insurance products specifically tailored to meet the needs of people on low incomes.

Use innovative technology to tailor program, marketing and referral delivery.

We’re exploring digital and financial inclusion strategies with corporate partners.

Community-led

GOAL

Over 80 per cent of our network say ‘client expectation was exceeded or met’

PROGRESS

On track

Reach

GOAL

Programs reach over 1 million people

PROGRESS

On track

Making good progressIn December 2012, our Board launched ‘Count Me In’ – an audacious strategic direction with five specific priorities for the 2013-2018 period.

8



Measure and communicate how activities contribute to client economic mobility and wellbeing.

The NILS outcomes evaluation found that 82 per cent of clients experienced a net improvement in economic outcomes, as well as greater financial independence and ability to absorb one off unexpected shocks.

Partner with research centres to undertake impact assessment enabling learning, continual improvement, shared knowledge.

We deferred plans to set up a ‘Financial Inclusion Cooperative Research Centre’ due to a lack of funding.

Examine and share impact with reference to health, employment, income generation and family wellbeing.

The NILS outcomes evaluation found that 74 per cent of clients experienced a net improvement in social and health outcomes, including confidence, self-esteem, personal relationships and participation in society.

Evaluate programs against intended outcomes

Evaluation and impact reports covered NILS, Good Money and the Remote NILS Pilot.


Define financial inclusion continuum from financial crisis to financial resilience, clear pathways and programs.

New pro bono research by Strategic Project Partners, demonstrated the economic case for financial inclusion, microfinance, and economic growth. Our Financial Inclusion Continuum was published by the US Center for Financial Inclusion.

Shared learning: Partner with others to establish economic inclusion cooperative research.

Plans to set up a ‘Financial Inclusion Cooperative Research Centre’ were deferred due to a lack of funding, but we are exploring other research opportunities.

Understand and share drivers of social inclusion, and interrelationships with economic inclusion.

We engaged with thought leaders in Australia through the Australian Bankers Association Reputation Forum, MoneySmart Week Advisory Committee, Australian Financial Inclusion Network and Indigenous Financial Services Network.

Engage and influence key actors from all sectors to enable economic inclusion.

Our submissions to the Financial System Inquiry were noted by Chair, David Murray. Our work with the New Zealand Government and Bank of New Zealand culminated in the launch of a local microfinance program in August 2013. We participated in G20 calling for Financial Inclusion Action Plans for all G20 countries.


Attract, develop and retain a talented team with high capacity in social justice, economic development and creative community engagement.

Employee engagement survey in October 2013 showed 88 per cent organisation engagement. This was well above the Australian average for engagement (41 per cent) and not-for-profit organisations (48 per cent). We’re working towards Investors in People accreditation by focusing on improved people development.

Expand funding through appropriate partnerships, donations, sponsorship and self-sustaining programs.

New corporate partnerships are being explored and new relationships were established with Suncorp Group and IAG. We implemented a sponsorship strategy to support our National NILS Conference. Untied retained earnings increased to $1.2 million.

Board, executive and staff are focused on operational program excellence, financial stewardship, ethics, social policy, accountability and organisational development.

Each year management and employees agree annual work plans in line with our strategic priorities. We’ve worked with our Board to implement improved reporting and risk monitoring.

Build mutually beneficial relationships that contribute to our vision and are aligned with our values.

Ongoing investment in building and maintaining funding and partner relationships.

Impact

GOAL

Increased economic mobility

PROGRESS

On track

Inform

GOAL

‘Economic inclusion’ – term is understood and key actors play their role

PROGRESS

Behind schedule

Strength

GOAL

Broad funding base – sustainable and growing

PROGRESS

On track

9

Annual Report 2014

NILS (630)

Good Money (3)

StepUP Loan (39)

Debt Deduct Pilot (5)

Remote Services Delivery Areas

AddsUP (94)

ACT — 2

QLD — 114

NSW — 155

NT — 11

SA — 39

TAS — 83

VIC — 112

WA — 114

Mapping Microfinance

Good Shepherd Microfinance works with a network of 260 community providers across Australia. These organisations complete a comprehensive accreditation process which enables them to deliver microfinance programs to people on low incomes.

Each provider shares our commitment to enable clients to define and realise their own financial wellbeing through a process that treats people with dignity and respect.

The locations of these providers are illustrated here.

Locations

10


11

Annual Report 2014

No interest loans change lives

82% of clients experienced a net improvement in economic outcomes, such as savings in food and utilities expenses as well as greater financial independence and ability to absorb one off unexpected shocks.

Our flagship program NILS is a national community-based initiative offering clients on low incomes access to fair, safe, no interest credit, up to a value of $1,200. NILS has no fees, charges or interest payments, and can be used for essential household goods and services.

This year 24,378 loans were written, the highest ever in a 12-month period, totalling almost $22 million. This year’s write-off rate was 5.66 per cent.

Women are the primary borrowers (68 per cent) with the typical age of 35-44, the average loan amount was $902 and the main items purposed continues to be fridges and washing machines. However, the loans are increasingly being accessed for other items such as lounge suites, beds and mattresses, personal computers and televisions.

According to the research report ‘Life Changing Loans at No Interest – An Outcomes Evaluation of Good Shepherd Microfinance’s NILS’,1 the program reaches Australia’s most vulnerable people. It found that for every dollar invested in NILS, a social and economic return of $1.59 is created. $2.54 of social and economic value is achieved when only the actual financial costs are considered.

74% experienced a net improvement in social and health outcomes. This includes a change in confidence, self-esteem, personal relationships and participation in society.

47% improved their financial capabilities including budgeting, saving money and maintaining an emergency savings fund.

General household appliances

Other

Fridges

Washing machines

Household furniture

Computers

Repairs/maintenance

Vehicle repairs

Vehicle registration

Beds

Delivery

Health related

Outdoor equip

171615131184443320

Loan purpose (%)

GROWING PROGRAMS

12


0

5000

10000

15000

20000

25000

2011 2012 2013 2014

15,266

21,11422,349

24,378

0

5

10

15

20

25

2011 2012 2013 2014

13.2

18.120.8 22.0

94% 55% 80% 43%were living under the poverty line

were severely financially excluded

of clients who had previously used fringe credit stopped

live in a single parent family with dependants.

Number of loans Value of loan capital ($m)

Reach ImpactCommunity–led

1. Bennet, S. Georgouras, M. Hems, L. Marjolin, A. and Wong, J. (2013). Life Changing Loans at No Interest: An Outcomes Evaluation of the Good Shepherd Microfiance’s No Interest Loan Scheme (NILS), Centre for Social Impact (CSI), University of New South Wales, for Good Shepherd Microfinance. 13

Annual Report 2014

Taking the path less travelledWith more than 43 per cent of Aboriginal or Torres Strait Islanders considered to be financially excluded, this group represents some of the most vulnerable people in our community.

Over the past two years we’ve successfully partnered with several organisations to deliver the NILS program to Aboriginal and Torres Strait Islander people and others living in remote communities. This has included 24 locations in Far North Queensland, Rockhampton, Darwin, the Kimberley and the Anangu Pitjantjatjara Yankunytjatjara (APY) Lands.

Together with our six local providers, we’ve faced a number of challenges and learnt from our shared experiences. For example the delivery of items acquired through a NILS loan can be problematic due to the large distances and cost of transportation, and difficulty in delivering during the wet season.

Initially, this challenge was partly alleviated by delivery subsidies through our energy inclusion program and the former Home Energy Saving Scheme (HESS). More recently we’ve addressed this issue working with our partner The Good Guys who are offering free delivery through our online buying service, Good2GoNow.

The development of partnerships with strong and resourceful organisations has meant efficient use of resources, increased awareness of NILS, an holistic approach to “money business” and more effective community engagement.

This work has been made possible due to funding from the Australian Government Department of Social Services.

Community –led

22 per cent of NILS clients identify as Aboriginal or Torres Strait Islander people.

Remote service NILS 2013 & 2014 Total

Loans delivered 519

Loan amounts $402,787

Photo: NILS Client of Echuca Neighbourhood House14


Managing home energy costs

Australian electricity prices have increased 50 per cent over the past four years and further rises are expected in the future.2

In 2012, we partnered with the Australian Government to administer a subsidy program, distribute funding to the network, provide training and build an online buying service as part of the former Home Energy Saver Scheme (HESS).

The program enabled NILS borrowers to receive a subsidy to help purchase an energy efficient appliance which would then help to reduce their ongoing energy bills. Clients also made significant savings if they chose to buy their appliance through our online buying service - Good2GoNow.

Almost 6,500 appliances were subsidised as part of our energy inclusion program through HESS which ended on 30 June 2014. We’ve estimated that over the next 10 years clients will save more than $10 million in reduced energy costs and around 23,000 tonnes of CO2 emissions.

2,617 2,506 382Fridges Washing

machinesClothes dryers

Households with low income spend on average almost 10 per cent of their gross household weekly income on total household energy costs, around three times that of households with high income.2

Single parents with dependent children spend the highest proportion of gross income on household energy costs.3

Energy Ombudsmen across Australia have expressed their concern at the high numbers of consumers contacting them with credit issues – a strong indicator of the growing issue of energy affordability.

2. Australian Energy Market Commission, 2013 Residential Electricity Price Trends report, Sydney cited in Australian Government Department of Industry 2014 Energy white paper green paper.

3. Australian Bureau of Statistics 4670.0 - Household Energy Consumption Survey, Australia.

Reach

$4,347,278 5,275 6,498$ of subsidies provided to enable affordable purchases

Number of NILS loans to buy energy efficiency items

Number of energy efficient appliances

Energy inclusion

15

Annual Report 2014

Going the distanceMegan Blacklow is a microfinance worker at the Port Douglas Neighbourhood Centre. She provides NILS clients with access to safe, fair and affordable loans for essential goods, such as fridges and washing machines.

At the National NILS Conference in June 2014, Megan won The Gavan Podbury Award for NILS Excellence, for having gone above and beyond the call of duty.

One of Megan’s many fans is Jenny Chapman from the Port Douglas Neighbourhood Centre’s Loan Assessment Committee.

“Megan has a lovely rapport with her clients,” says Jenny. “She nurtures connections and remains constantly focused on the NILS concept of safe, fair and affordable credit for low income households.”

“Megan’s enthusiasm and dedication to her role as NILS coordinator is quite inspiring. Her insight, hands-on and down to earth business approach continues to go from strength to strength.”

Shona Barbour, Treasurer of the Port Douglas Community Service Network Management Committee, agrees. Shona says that when Megan commenced her position in 2008, she identified that the Mossman Aboriginal community was the most in need of NILS.

“An unscrupulous door to door salesman had been active in that community and these vulnerable people were signing contracts at exorbitant interest rates, placing them in long term financial crisis,” says Shona.

Megan began driving to the Mossman Community Centre and Mossman Gorge Aboriginal community every fortnight to ensure that people had access to NILS.

“Megan also identified that the existing promotional material was not appealing to the Indigenous community, and a local artist was commissioned to provide artwork for our advertising campaign, which has been extremely successful.”

The mutual trust and respect between Megan and her clients is clearly evidenced through her clients’ 100 per cent repayment rate.

Community–led

“Today, 90 per cent of our NILS clients are from the Indigenous community. The majority of these clients are only able to access NILS because of Megan’s regular outreach,” Shona says.

Photo by Mylene Heidke. L–R Megan Blacklow, Betty Olbar, Mandy Stone, Molly Hart and Tharrwiilnda Hart.16


Back on trackRobert never imagined he would need to access NILS. Like many of our clients, he previously always counted himself lucky.

“I had a roof over my head, good health, and was never without work,” Robert says.

But everything changed after a relationship break-up. He found himself on an unexpected journey without any possessions, money or a place to live.

After eight months in five temporary houses, Robert finally moved into semi-permanent but unfurnished housing. He needed to find a way to buy essential appliances.

“After a couple of nasty payday loans paying interest I couldn’t afford, I was desperate to find another way to finance my new household items.”

Robert says he heard of NILS and Good Money Collingwood at the perfect moment, and couldn’t believe that the loan had no fees, charges or interest.

With NILS workers supporting him to find the best price appliances, Robert furnished his house with a new fridge and washing machine within the $1,200 loan limit.

“As soon as I got the fridge and washing machine, the apartment felt like home. I don’t know where else I could have got these things from,” he says.

Now back on his feet, Robert is making fortnightly repayments for the next twelve months at an affordable rate.

With stability returned, and “the extra finance to get things together,” he is now planning to set up a small handyman business.

Reach

Photo: Robert, NILS client, Good Money Collingwood 17

Annual Report 2014

A step in the right directionStepUP is a low interest loan for people on low incomes who have difficulty accessing credit from a bank. Launched at five locations in Victoria and New South Wales in 2004, today StepUP loans are available at 39 sites across all states. In the past year alone, 2,950 loans were approved with a cumulative value of $8.4 million.

Through our innovative partnership with National Australia Bank (NAB), people can borrow between $800 – $3,000 at 5.99 per cent per annum with up to three years to pay it back. The loans sit on NAB’s balance sheet as a variation of a mainstream personal loan. This year, StepUP’s write-off rate was 6.78 per cent.

Similar to NILS, women are the primary borrowers - 54 per cent - but the age demographics for StepUP are younger than for NILS, with clients typically aged between 18 and 44 years. Over 70 per cent of loans are vehicle related, and 62 per cent of clients live in public or private rentals.

Vehicle purchase

Household other

Vehicle repair

Health related

Computer

Vocational training

Maintenance

Other

739732222

The impact of StepUP An independent research report by the Centre for Social Impact, ‘A little help goes a long way’4, launched last year showed that the program is having significant impact. It found that there is $2.68 in value returned for every dollar invested in the program.

This proactive evaluation was recognised with a 2014 Impact Measurement Award from the Social Impact Measurement Network Australia in the category of Corporate/Not for Profit Partnership.

While StepUP loans have proved effective at improving financial inclusion, there is still unmet demand and we’re looking at ways we can increase access for people in areas where there are no physical StepUP locations.

In May 2014, the Bank of New Zealand committed $10 million over five years to enable the expansion of the NILS and StepUP programs into New Zealand. We’re looking forward to the next chapter of this impactful program.

Loan purpose 2014 (%)

experienced a positive change in financial

literacy

36%of clients experienced a positive change in financial confidence

50%experienced a positive

change in their financial management

abilities

47%of people who had

previously borrowed from a fringe lender

stopped.

64%4. A little help goes a long way: Measuring the impact of the StepUP loan program, Centre for Social Impact 2013, Centre for

Social Impact (CSI) University of New South Wales for NAB. 18


Impact

The long road home When Shahla and her nine-year old daughter Raya emigrated from Iran two and a half years ago, they left behind a network of family, friends, and colleagues to begin a new life filled with promise and success.

But the reality they faced upon arriving in Melbourne was one full of challenges and frustration. Shahla and Raya were taking lengthy public transport journeys daily, meaning that Shahla was unable to find regular work - she didn’t have enough time in the day between dropping off and picking up Raya from school.

“Everything took more planning, more time and was much more expensive,” Shahla explains. “But then a friend who had just bought a car told me about StepUP loans.”

Shahla promptly applied for a loan through Good Money Dandenong, one of 39 StepUP low interest loan program sites around the country.

Since buying her car through StepUP, Shahla no longer has to sacrifice her studies and work.

“Now things are so much easier. We arrive to places faster, earlier and not stressed, and can fit so much more in the day,” she says.

After driving Raya to school, Shahla now heads to English classes and attends her childcare diploma placement. She also regularly pops down to the shops for groceries without a second thought.

With a fixed low interest rate, no fees and a flexible three-year repayment period, Shahla can plan for things down the road without the need to wait for the bus.

“Having a car has changed everything, I tell everyone I know about StepUP loans.”

Photo: Shahla and her daughter Raya, NILS client, Good Money Dandenong 19

Good Money to get you goingThrough our journey we identified there was an opportunity to reach a new market not served by the community providers.

Together with NAB and the Victorian Government, we developed Good Money - an innovative concept that delivers financial services in prominent ‘high street’ locations. Our three Victorian pilot stores in Geelong, Collingwood and Dandenong offer a one-stop shop for a range of financial products and financial counselling.

Our first store opened in April 2012, and two years down the road, more than 10,000 customers have approached Good Money. This is approximately 420 financial conversations per month. A total of 1,508 NILS and StepUP loans have stimulated local economies, enabling $2.3 million of NAB capital to be utilised.

Good Money assists those most in needGood Money is successfully attracting a different client base. Customers are younger on average than clients reached through our community providers and 43 per cent of enquiries to Good Money come from men. Approximately 90 per cent of clients receive government income support and less than one in 10 clients are employed.

With the number of loans steadily increasing by an average of 10 per cent each month, we are now expanding the program. The South Australian Government has committed funds to open a store in Adelaide in early 2015.

Breaking the cycle of people turning to payday lenders An initial program evaluation by RMIT5 found that Good Money is improving efficiency, integration and delivery of community finance. It also found that the program provides a safe alternative to fringe lending, targeted at people who do not traditionally seek welfare.

While 70 per cent of customers were classified as severely financially excluded, around 86 per cent had never accessed community finance, but 34 per cent had used payday lending services. Significantly, more than half of these customers have said they do not intend to use a payday lender again. Almost all clients – 96 per cent - also shared that it was likely they would visit Good Money again for support with their financial needs.

The evaluation also found that customer experiences are overwhelmingly positive. Over 95 per cent of customers felt valued and more positive about their future.

of customers who had used payday lenders said they wouldn’t use payday

lenders again

of customers are severely financially excluded

felt more confident in handling their finances

50% 70% 93%

5. Russell, R and Banks, M, 2013. Good Money interim Report for Good Shepherd Microfinance, RMIT20


Not just a number at Good MoneyLike many of our clients, John had never expected to find himself in need of additional support. He previously had a good career working in public health for the United Nations Office on Drugs and Crime in South Asia and continued to work in the community health services sector after arriving in Australia.

But after going through a divorce in 2008 he went through a very difficult time. Alone in a new country without support from family or friends he found himself making a few bad choices trying to cope with the separation from his son and the end of his marriage. It was during this time that he acquired a bad credit rating and found that “life can be cruel, especially with banks”.

“The banks told me I would have to wait five to seven years until I could apply for a loan,” says John. “No one would give me a second chance even though I previously had a steady income.”

John jumped from payday lender to payday lender, taking out fast cash loans for $150 and paying back $250 or more each time until he found Good Money in Collingwood.

“You are a person with Good Money. I’m not a number - I’m John,” he says.

Through John’s previous work, he was well aware of the power and success of microfinance throughout South Asia. What he admires most is the concept of circular community credit – when a borrower makes a repayment to NILS, funds are then available to someone else in the community.

“They looked at me like a person, and were friendly. I was feeling swamped and needed to hit the pause button. They made me realise I had options, and gave me another chance by sorting out my issues with Centrelink and giving me a loan.”

John went searching for the essentials to get him back on track. He bought a washing machine for his public housing apartment and a television so that his ten-year-old son would enjoy staying with him on the long weekends and holidays.

“I felt more committed to repaying, as I had a stake in it. Good Money was created for the community and people just like me,” said John.

Inform

Photo: John, NILS client, Good Money Collingwood 21

Annual Report 2014

Debt Deduct A much needed circuit breaker

Rewarding good savings habits

AddsUP is an innovative and popular program that offers dollar for dollar matched savings up to $500. It was developed as an incentive to encourage positive savings habits and financial independence and is offered to people who have successfully completed paying off a NILS or StepUP loan.

Over five years of operation, AddsUP has provided $560,000 in matched savings.

AddsUP savings can be for any purpose and may be accessed at any time. The program was created based on feedback from community workers that microfinance offerings were mainly focused on credit, and there was a savings product gap.

The program is delivered through 70 providers at 94 locations across Australia in partnership with NAB.

This year, NAB developed a new online referral system to streamline the AddsUP application process, making it more efficient. As at June 2014, the program had reached 1,128 clients.

Debt Deduct is a pilot designed to work as a circuit breaker addressing the immediate need for debt relief. With no-interest consolidation loans of up to $2,000 and the support of a financial counsellor, Debt Deduct is an innovative response to increase people’s financial literacy, capacity and resilience.

These loans can only be accessed through financial counsellors and are available to payoff high cost and high risk debt such as payday loans and clear outstanding defaults on credit files, appliance rentals and pawned goods.

The number of loans more than doubled this year with 55 loans totalling $78,349. The average loan amount is $1,425.

The most common reasons for clients getting into debt were health and mental health issues, relationship breakdowns, job losses or simply a shortage of funds forcing them to take out payday loans.

An initial evaluation of Debt Deduct, conducted in May 2014, suggests that the loan provided clients with immediate debt relief that resulted in an increased ability to meet other financial commitments.

Financial counsellors commented that Debt Deduct was another useful tool in the toolbox. The notion of a partnership between financial counselling and microfinance works well and results in referrals between Debt Deduct and other microfinance products.

Operating since late 2012, the program is another example of a successful cross-sector partnership. Operational funding was provided by the Victorian Government’s Department of Human Services as part of their ongoing commitment of $500,000 a year to strengthen microfinance in Victoria. NAB provided $100,000 capital for the Debt Deduct loans across the four pilot locations in Victoria.

2014 2013

Accounts opened

708 473

Accounts matched

435 301

Value of accounts matched

$216,711 $149,853

Average matched amount

$497 $497

2014 2013

Loans written 55 36

Type of debts paid

Finance debts 27 14

Old debts 10 10

Pawned goods 5 2

Appliance rental 6 3

Miscellaneous 7 7

22


Fast-tracking purchases

No more washing by hand

This year we developed a new online buying service – Good2GoNow – to enable our NILS and StepUP clients to access quality, energy efficient household appliances at competitive commercial prices.

We conducted a detailed tender process to determine which major whitegoods supplier could deliver the best products and service for our clients, awarding the contract to The Good Guys in June 2013. The first appliance was sold through the program in July 2013.

Just a year down the track, Good2GoNow has provided more than 4,000 appliances to clients across Australia.

With four kids aged eight and under, washing clothes is a daily part of life for Candiannd and husband Sean.

“We only had a washing machine that took 7.5 kilos, and it broke down. I wasn’t going to stand there and hand-wash all our clothes, so a friend had told me about Good Money,” says Candiannd. “I went there because there was no interest on the loan.”

Candiannd and her family were finding it hard to put together the money for regular trips to the laundromat, something they no longer have to worry about.

“What we were able to get was unbelievable, we got a huge washing machine. It makes things way easier.”

Time and cost savingsGood2GoNow has led to a faster turnaround of NILS loans. Once the NILS agreement has been signed by the client, the goods can be despatched and received promptly. Delivery is not reliant on a cheque or other payment method being cleared by the retailer’s bank, which can sometimes take several days. In an emergency situation this approval process can be expedited enabling the product to be delivered to the client on the same day that the loan was approved.

By harnessing the combined buying power of the NILS and StepUP network, we were able to negotiate better prices on behalf of clients.

Clients have saved over $600,000 compared to the average market price of the same products. When compared with recommended retail price, the savings are even higher.

The establishment of the Good2GoNow online buying service was funded by the Australian Government Department of Social Services.

Candiannd was approved for a NILS loan and chose to purchase her appliance using Good2GoNow. It was promptly delivered and installed by her local The Good Guys store. She says the quick turnaround time was a huge plus.

“Once everything was finalised, the washing machine turned up two days later, I didn’t have to wait weeks. My kids’ favourite thing is making washing, so it was very lucky that it came quickly!” she says.

23

Annual Report 2014

Good Insurance A path to protection Research shows that many people living on low incomes are interested in and need insurance products, but they are unable to access suitable and affordable cover. A lack of understanding of insurance and its related products is also a significant contributing factor to this exclusion.

Without insurance, it’s not possible to accumulate assets safely or confidently use everyday essentials, such as a motor vehicle, with the peace of mind that comes with knowing that assets are protected if bad luck strikes.

We believe it’s possible to sustainably insure the large number of people who are currently excluded from the insurance market and are working to establish tailored and affordable personal insurance products.

As with our other products and services, we are unable to do this alone; we need the advice and expertise of partners within the community, industry and government sectors to create and deliver a product that caters for the insurance needs of people living on low incomes.

Our new programGood Insurance was established in 2014 and is supported by a partnership with leading insurer – Suncorp Group.

The objective of the insurance program is to address the current issue of non-insurance amongst people on low incomes. The program will provide people with:

f Improved access to insurance via our national provider network

f Affordable insurance products

f Tailored products that fit consumer needs identified by research and test pilots

f A better understanding of insurance with product materials that are concise and in plain English.

A pilot with Suncorp Group will test product appetite and gather learnings to enhance future product development. This pilot will offer a home contents ‘fire and theft’ insurance proposition, tailored to our clients, and offered through 10 selected community organisations across Australia.

Our intent is to explore and deliver other potential insurance offerings under ‘Good Insurance’ such as home building, motor vehicle, pet and funeral insurance streams.

Reach

24


Mappingthe way forward

This new report adds to the mounting evidence demonstrating the profound benefits for both individuals and society if we can move even a small number of people away from financial hardship towards resilience and self-sufficiency.

Research and evaluation, such as this report, are a critical part of our approach. A significant program of evaluation has been established for 2014-15 with a focus on the impact of financial conversations with clients during the loan interview process.

The evidence is in – there is now a moral and economic case for microfinance in Australia.

Our ground breaking research report revealed that if just seven per cent of Australia’s financially excluded were able to improve their wealth position by accessing the right financial products, the nation’s annual gross domestic product (GDP) could increase by a staggering $19.7 billion.

The award winning ‘Microfinance and Inclusion and Economic Growth Report’ was commissioned by Good Shepherd Microfinance and conducted pro-bono by Strategic Project Partners (SPP).

It found that household wealth could increase by as much as $50 billion over time, and could also lead to a predicted $2.6 billion saving in government health, welfare and justice spending.

Contributing to public policy

We believe that financial inclusion and building resilience should be stated aims of the Australian financial system. This was key message in our joint submission with Good Shepherd Youth and Family Service to the Financial System Inquiry.

Our recommendations included that the Australian Government, the Reserve Bank of Australia and other stakeholders invest in microfinance banking and financial services as a long term proposition, in collaboration with the not for profit and community sector. We also called for stronger regulation, especially in the fringe-lending sector, rather than further deregulation.

Inform

Financial inclusion supports economic growth

25

Annual Report 2014

Focusing on people

We’re on this journey together At Good Shepherd Microfinance, we value the contribution that every person makes to our organisation. We’re on a journey to create a workplace where people find meaning in their work, are energised by our mission and purpose and are given opportunities to reach their full potential.

A culture of innovation As a growing organisation, we’re committed to an environment where people feel safe and well supported to undertake their work. We encourage a culture of saying yes to new ideas and approaches.

We continue to work within our ‘Investors in People’ framework. We’re in the process of developing improved performance management processes, health and wellbeing policies and procedures that make everyone accountable for safety.

Specifically, we recognise that our performance system needs to be embedded into our daily routine, that we need to be proactive with our work Health and Safety approaches, and that we can include more people in our long term planning. These are areas we’ll strengthen over the next year.

Promoting life-work balance To support employee wellbeing, we’ve worked with an external expert to introduce the Health Enhancement for Living Program (HELP) that encourages employees to be more mindful of opportunities to reduce stress and build personal resilience.

The Australian Services Union represented staff during negotiations on a new two-year enterprise agreement in 2013. The majority of staff voted to approve the agreement that, following approval from Fair Work Australia, became operational in June 2014. The main points addressed are the introduction of family violence leave, increased flexibility around study leave and increases in pay. The pay increases reflected the landmark 2012 Fair Work Australia decision on equal remuneration for community sector workers. Increases in pay were backdated to December 2013 with increases due each December.

Developing employeesOur ongoing organisation-wide focus on employee development and people management is having a positive impact. An employee engagement survey conducted in October 2013 by an external agency found that 74 per cent of Good Shepherd Microfinance employees were engaged overall and 88 per cent with the organisation.

We recognise that investing time, energy and resources in developing and supporting our employees makes sound business sense. Training programs focus on individual development across the areas of Aboriginal cultural awareness, customer service, managing people and performance, community development and improving key workplace skills.

Our ties to Good Shepherd Australia New Zealand remain strong with joint leadership development programs and a comprehensive orientation session for new employees.

As an organisation focused on breaking the cycle of disadvantage for women and girls, we’ve got an important role to play in supporting women in the workplace. In particular, we’re strong advocates of women in management positions and provide opportunities for leadership coaching and development. The gender balance of our workforce reflects our client base. Almost 70 per cent of our employees are women and 73 per cent of people in management positions are women.

65N u m b e r o f e m p l oy e e s

w o m e n ( % )69%

CLIENTS

WOMEN IN MANAGEMENT

73%

67%

EMPLOYEES

Engaged employees (%)


Australian Average

Not-for-profit

Organisation 88 34 41

Job 74 46 50

Overall 74 41 48

26


While ‘flexibility’ is a word often touted in many community organisations and businesses, some employees continue the struggle to find the right balance.

However, one Good Shepherd Microfinance employee has managed to get the balance right. Sally Levy works part-time as a quality assurance officer for the NILS program.

“Despite working part-time, I don’t feel out of the loop or left behind. I’m confident that my team always wants me to be at the table,” says Sally.

With a background in microfinance and accounting, Sally was keen to continue working after starting a family.

“I wanted to find a balance of meaningful work and time for my family. That meant finding a role without extended trips overseas,” she says.

When Sally heard about the role in accreditation at Good Shepherd Microfinance she was quick to submit her resume.

“The job advertisement said the role was full-time, but that they would also consider applicants who wanted to work on a part-time basis. It was the perfect job for me!”

“I can be truly present and engaged when I’m with my daughter. I’m not worrying about work or constantly checking my mobile phone. And I even get to have some time to myself!”

Changing priorities along life’s path

Strength

Sally works three days per week in the office, which means she gets to spend special time with her four-year-old daughter. Sally can also schedule any local or inter-state travel around her family commitments.

Our work policies support staff at all levels to create a work contract that fits with their lives, with 34 per cent of total staff work part-time.

Work-life balance is a priority for us. Some of the other ways we support employees include providing leave for carers, community service and study.

Photo: Sally Levy, NILS Quality Assurance Officer, Good Shepherd Microfinance, with her four year old daughter 27

Annual Report 2014

Volunteers are the heart and soul of the NILS network, providing an invaluable service to clients every day. Across Australia, 75 per cent, or over 1,000 of our NILS microfinance workers are volunteers.

The collective time volunteers contribute is equivalent to 120 full-time positions over a 12-month period.

Margaret Jackson volunteers at Care Goondiwindi in Queensland. She and her fellow volunteers are at the heart of our strategy to be community-led.

“I love volunteering with NILS. It is a great concept for a worthwhile cause and it builds my confidence and knowledge,” Margaret says.

With a background in banking, Margaret is enjoying using and building upon her skills with the NILS program.

“My experience with NILS continuously gives me new opportunities to learn and interesting opportunities to meet, engage and work with a great team and clients.”

“I know I am appreciated by the team and the whole network, and that’s what is important to me.”

Our volunteer voyage

Volunteers at the heart of microfinance

1,300 1,000 120 full-time positions

or 77% are volunteersmicrofinance workers The collective time volunteers contribute is equivalent to 120 full-time positions over a 12-month period

Volunteers account for 44 % of the time spent delivering NILS in 630 locations across Australia

28


Our aim is to build a vibrant, engaged online learning community. Importantly, Good Learning supports collaboration, which is essential among a national network of 260 community organisations.

Since its launch in December 2013, 1,208 people have signed up to take advantage of the 17 learning modules available. New modules are being added frequently and each module takes around 30 minutes to complete.

Microfinance workers from anywhere in Australia can share ideas and tips, as well as tap into training courses and video tutorials. One of the key features is an online discussion forum where people share some of their challenges such as ‘no show clients’ or ‘topping up loans’.

“The Good Learning program is excellent. My supervisor tells me things, but Good Learning reinforces the procedure,” says Margaret from Care Goondiwindi.

The platform is continuously expanding with more users and new modules. An additional 12 modules are expected to be released in 2014-15, including the StepUP curriculum and Budgeting by MoneySmart. This budgeting module incorporates MoneySmart’s comprehensive content with our network’s skill at respectful and non-judgemental financial conversations.

An online learning community

Good Learning is a new online platform offering the microfinance network opportunities for practical, collaborative and innovative learning and development. The program provides accessible, community-led learning programs that inform and equip providers to better assist their clients.

29

Annual Report 2014

Our reconciliation journey

The Good Shepherd network works for the dignity of all peoples and cultures. We have a human rights approach to our work – in the services we provide, in the partnerships we enter into and in our quest for social change.

Our vision for reconciliation is a world where Aboriginal and Torres Strait Islander people enjoy the human rights and fullness of life equal with all other people of Australia.

We launched our Reconciliation Action Plan (RAP) on International Human Rights Day in December 2013. It commits us to reconciliation and sets out a plan to work respectfully and meaningfully with Aboriginal and Torres Strait Islander people.

As part of the RAP, we will:

f Play our role in our sphere of influence to close the 11 year life expectancy gap between Aboriginal people and other Australians;

f Be welcoming, understanding and meet the needs of Aboriginal clients; and

f Work with Aboriginal and Torres Strait Islander stakeholders to build stronger relationships.

We will also provide ways for staff to engage with reconciliation events and activities, and report annually on our progress. The RAP program was developed by Reconciliation Australia. Through it, organisations develop business plans that document what they will do to contribute to reconciliation in Australia.

Stacey took out her first NILS loan six years ago to urgently fix her unreliable car. She was travelling two hours a day to visit her infant son in hospital for several months, and needed dependable transport to make the journey.

“My son was born 13 weeks premature and had heart problems, so he had to stay at the Westmead Hospital, an hour’s drive from where I was living,” Stacey says.

“Having the car fixed meant that I could get to and from the hospital every day.”

Stacey and her three young children also had to relocate suddenly to Sydney to seek medical help during her pregnancy, so she needed to set up a new home from scratch.

“I was living in Wollongong and didn’t have anything up here, so I’ve taken out some NILS loans, and bit by bit I’m getting everything.”

Stacey obtained a NILS loan through Hills Community Aid to help with paying her car registration and has purchased a fridge, beds for her children, a washing machine and dryer.

22% Aboriginal or Torres Strait Islander people

of NILS clients are

An important journey for one NILS client

“It has helped me heaps, I had nothing when I came back to Windsor, and I’m nearly finished my last loan and thinking that I don’t need anything else.”

“My son is fine and is in kindergarten – and I’m happy,” she says.

30


Over the past year, a comprehensive program of training and support has allowed us to connect with our expanding network of NILS and StepUP providers.

Our engagement with the network includes face-to-face training sessions, informal site visits, regular phone calls and emails. We also host and are involved in a number of events including state-based forums, network meetings and the National NILS Conference.

Our annual network survey recorded that 83 per cent were “very satisfied or satisfied” with the activities of Good Shepherd Microfinance – and 82 per cent of the network feel: “very or somewhat connected with their state or regional network.”

Ensuring the quality of the networkThe comprehensive accreditation process ensures that providers are well trained to deliver loans, steward capital and best reach and serve Australia’s most vulnerable people.

Our Quality Assurance team is responsible for reducing the network’s operational, liquidity and credit risk. Where issues are identified, the Quality Assurance team works with the individual organisations to mitigate risks and ensure the best outcome for clients and stakeholders.

This year the Quality Assurance team conducted 41 site visits and arrears rates for these providers decreased by an average of 21 per cent.

Our focus this year was to support providers to move to NILS4 – our upgraded reporting system. 75 per cent of providers are now using this system – an increase from 57 per cent.

Strengthening Governance

440 delegates attended the annual National NILS Conference

Activities Number

Network meetings (face to face and teleconference) 50

Formal site visits 80

Informal site visits 120

Number of people trained in face-to-face training sessions 985

Participants in state forums 268

National conference delegates 440

Additional capital allocated to the expansion of the network $1.84 million

Supporting providers with NILS4 migrations – moving to the NILS4 database

An 18% increase in the number of providers using NILS4 database

31

Annual Report 2014

By the community for the communityEight years ago, Jenny Elvey and two colleagues realised there was a huge local need in Bendigo for affordable financial programs. They founded Bendigo Family and Financial Services without any initial funding, managing to get it up and running purely through sausage sizzles and local fundraising drives. They then began NILS and StepUP and later AddsUP as flagship programs for the organisation.

Several years into the journey, the organisation’s hard work has led to it receiving the Good Shepherd Microfinance award for the “Most number of NILS loans” issued in Victoria in 2013-14. Bendigo Family and Financial Services NILS delivered a total of 516 loans in the past year.

The organisation is an example of best practice – it delivers high quality client service and has been a leader in the provider network, trailblazing programs like energy inclusion, Good Learning online training, and Good2GoNow.

Recently, bushfires, floods and droughts have severely affected the local community, resulting in widespread homelessness.

“We needed to support clients to get back on their feet, so we spoke to them to find out their most immediate needs,” says Jenny Elvey, General Manager of Bendigo Family and Financial Services.

“We realised there was a need for NILS in Pyramid Hill, which is a 75 minute drive from Bendigo, so we have set up a NILS outreach program through the neighbourhood house there.”

Despite the financial challenges their clients face, the arrears rate is very low. Jenny thinks this is because the Bendigo Financial Services staff and volunteers believe in the programs and focus on building real rapport with clients. They also spend time with clients explaining the model behind the microfinance programs.

Before clients get the cheque for their goods or services, they have been in communication with the organisation three or four times, in a relaxed and friendly environment. Staff members also enjoy making a special fuss over client’s children.

Impact

Photo: Bendigo Family and Financial Services is located in the major regional city of Bendigo in Victoria 32


Strength

Every day we hear stories about how microfinance has made a considerable difference to the lives of people living on low incomes – enabling them to improve their financial capability, resilience and overall wellbeing.

This year we heard a very special story, from one National Australia Bank (NAB) employee, who shared her childhood experience of her family’s struggle with money. Mary’s father died of cancer when she was eight years old and the bills were stacking up for her mother. When the fridge broke down, Mary and her mother used an esky to keep meat cold.

“Our neighbours would sneak me some ice cream and the odd icy-pole. As much as mum tried, the expenses just kept coming in. I know it was hard for mum - she didn’t have any support around her and all she wanted was to get a loan and pay it back. But no one would help her,” says Mary.

Just when Mary thought they would have an esky forever, her mother found a place that provided no interest loans for white goods. It was a NILS loan that turned out to be life changing.

Mary’s story touched the hearts of many of her NAB colleagues.

This year we were pleased to celebrate a major microfinance milestone with NAB when together we provided more than 100,000 no or low interest loans to people living on low incomes in Australia.

One of the key drivers of financial exclusion is the reluctance of banks and others to innovate to reach new markets and to consider pricing that would make inclusive finance more sustainable.

NAB is one of the rare exceptions with a significant commitment to financial inclusion demonstrated through both their investment and leadership in this area.

Together we’ve built Australia’s leading microfinance partnership with the shared aim to reach one million people on low incomes by 2018.

We are measuring and tracking how many people (adults, children and other dependants) have benefited from microfinance. This reporting demonstrates that since 2005, together we have delivered 145,000 microfinance products impacting the lives of more than 335,000 people.

NAB’s investment in this partnership goes beyond their $130 million commitment to loan capital. In addition to their world leading research report “Measuring Financial Exlusion In Australia”, they also share their in-kind resources such as skills and expertise to develop innovative solutions to address the issues associated with financial exclusion in Australia.

Celebrating Australia’s leading microfinance partnership

145,000 190,000 335,000people have accessed microfinance products since 2005

additional people have been reached through these products including children and other dependants

people have benefited from microfinance since 2005

33

Annual Report 2014

Ian Clyde

Director Finance and Audit Committee Chair

“I get a lot of satisfaction from knowing that many NILS borrowers don’t return to exploitative payday lenders. As for the big picture, addressing market failure and financial exclusion throughout Australia by mainstreaming appropriate and affordable small-amount credit, is a game-changer.”

Ian Clyde has a law and policy background revolving around human rights, consumer protection and social justice. Ian has pursued these issues primarily in the public sector, with contributions ranging across Australian and State Governments, as well as the United Kingdom and European Union. His recent work has been in executive and leadership roles for government regulators.

John Langmore

Deputy Chair

“The great benefit of Good Shepherd Microfinance loans and financial support is that they reduce impediments to financial self-sufficiency by enabling people to borrow at no or low interest rates, to purchase goods or services that are essential to their wellbeing. This sometimes helps to turn a mountain into a molehill.”

After public policy and academic work in Papua New Guinea and Canberra, John Langmore was a Member of Parliament for 12 years and then a Divisional Director at the United Nations in New York for seven years. He is now a Professorial Fellow and Assistant Director Research (Security and Political Engagement) in the Melbourne School of Government, University of Melbourne.

Dr Christine Nixon APM Chairperson

“Good Shepherd Microfinance is about a hand up, not a handout. Microfinance loans provide a way to maintain people’s dignity, giving them hope and support in times of need, achieving their goals in a good way. There is huge potential for assisting the financially excluded in collaboration with business and not-for-profit organisations.”

Dr Christine Nixon has 38 years of policing experience, rising to the position of Assistant Commissioner, New South Wales Police Force and Victorian Police Chief Commissioner in 2001. After the Black Saturday fires in 2009, she chaired the Victorian Bushfire Reconstruction and Recovery Authority. Today, Dr Nixon is Chair of the Board, Monash College and Deputy Chancellor, Monash University. Christine fights for justice for women and minorities.

We are governed by a Board of Directors that serve on a voluntary basis. The Board is responsible for:

f Setting the strategic direction and policies of Good Shepherd Microfinance

f Monitoring overall organisational performance

f Approving and monitoring the annual budget, ensuring financial wellbeing, and setting risk appetite and controls

f Ensuring effective engagement with stakeholders

f Ensuring the organisation meets all regulatory and statutory requirements.

The Board has established the Finance and Audit Committee to assist in matters related to the ongoing financial condition, budgeting practices, risk management and statutory compliance.

Our Board

34


What do you believe is the mostimportant outcome of our work?

Vinita Godinho

Director

“The single most important measure of our work is that our customers feel empowered to confidently use money to achieve their goals. We’ve established a reputation for evidence-based impact and performance measurement, but I’d like to push the boundaries even further, by investigating global best practice for social performance reporting, and considering relevant indicators and measures in our own reporting.”

After more than two decades experience as a banker in India and Melbourne, Vinita Godinho is currently completing a PhD exploring Indigenous financial inclusion. She consults to a range of not-for-profits on project management, risk and governance frameworks and Indigenous financial inclusion. While at ANZ, Vinita worked with the First Nations Foundation as the volunteer project manager for MyMoola and was seconded to Reconciliation Australia to establish the Indigenous Financial Services Network (IFSN).

Denice Pitt

Director

“To raise the profile of financial exclusion and provide safe, fair and affordable options for people on low incomes. We need to put the spotlight on the issue and work with policy makers and industry to break the cycle of disadvantage for people who are struggling financially. At the same time, we must continue to provide solutions for the financially excluded in our community.”

Denice Pitt has played a significant role in the growth and success of numerous companies through leadership positions including Chief Executive Officer, Chief Operating Officer, Vice President of Operations and National Customer Service Manager. She has worked in a range of industries including telecommunications, outsourcing contact centre industries and now education and is now working as CEO of Swinburne Online.

Shelley Jones

Director

“The critical outcome for Good Shepherd Microfinance is to reach more people in need, that’s why we’ve set a goal to reach one million people by 2018. In reaching these people, our aim is for them to stabilise and improve their own situation and at the same time create a sense of confidence, dignity and hope for the future.”

Shelley Jones has an extensive domestic and international history in human resources leadership roles across a range of industries, especially mining, finance and education. She works in both the for-profit and not-for-profit sectors as a Board Director and management consultant. She also intends to do more international development work and has joined the Government’s Australian Civilian Corps, which was formed in 2011.

35

Annual Report 2014

Financials

Headline indicators 2014 2013 2012

Co

mm

un

ity

Le

d

Active NILS providers 217 246 233

Active StepUP providers 39 38 35

Unique locations (all providers) 669 634 598

Pro

gra

m D

eta

ils

NILS Loans (# new) 24,378 22,349 21,114

NILS Loan ($ m) 21.9 20.8 18.1

StepUP Loans (# new) 2,473 2,110 1,508

StepUP Loan ($ m) 6.7 5.9 4.2

HESS NILS subsidies (# NILS loans) 5,275 40 -

HESS NILS subsidies ($m) 4.35 0.02 -

Good Money enquiries 6,270 3,681 245

Info

rm

Research/evaluation reports 5 5 2

Policy papers/submissions 4 2 1

NILS provider satisfaction (%) 83 79 N/A

External events 9 3 2

Fin

an

ces

Revenue ($ m) 20.4 10.6 8.2

Costs ($ m) 19.7 10.2 8.1

Comprehensive income ($ m) 0.8 0.4 0.1

Assets ($ m) 17.3 29.6 32.7

Equity ($ m) 1.2 0.5 0.1

Pe

op

le

Number of staff (Full Time Equivalent) 52 49 29

Number of full-time staff 42 36 20

Number of part-time staff 24 20 14

Counting every step

36


Investment in programs 2014 2013 2012

Pro

gra

m I

nve

stm

en

t ($

'00

0) NILS 6,991 4,930 6,081

StepUP 3,027 2,742 1,076

Good Money 1,894 1,530 887

Energy inclusion 6,956 544 -

Remote NILS 766 528 -

Innovative Programs 24 - -

TOTAL INVESTMENT IN PROGRAMS 19,658 10,274 8,044

Income Statement 2014 2013 2012*

Reve

nu

e (

$'0

00

)

Operating grants 17,061 9,184 7,256

Corporate sponsors 1,241 1,168 804

Interest revenue 1,645 220 60

Donations 436 1 0

Other revenue 39 52 42

Total revenue 20,422 10,625 8,162

Exp

en

dit

ure

$

’00

0)

Grants to network 6,664 4,036 6,035

Subsidies payment (energy inclusion) 4,346 16 -

Staff and program consultants 5,293 3,933 1,213

Program operations, marketing, research and development

2,372 1,563 613

Occupancy and general operational expenditures

983 726 183

Total expenditures 19,658 10,274 8,044

Surplus / (deficit) 764 351 118

* 2011/12 contains only six months of operations from January - June 2012

Operating

grants 84%

Corporate

sponsors 6%

Interest revenue 8% Other revenue <1%Donations 2%

Revenue 2014

NILS 35%

StepUP 15%Good Money 10%

Energy

Inclusion 35%

Remote NILS 4% Innovative Programs 1%

Investment in programs 2014

37

Annual Report 2014

Statement of changes in equityFor the year ended 30 June 2013 Retained Earnings Reserve Total

$' 000 $' 000 $' 000

Balance at 1 July 2012 118 - 118

Surplus for the year 351 - 351

Transfers to reserves (150) 150 -

Balance at 30 June 2013 319 150 469

Surplus for the year 765 - 765

Transfers from reserves 150 (150) -

Balance at 30 June 2014 1,234 – 1,234

Statement of financial position 2014 2013 2012

Ass

ets

($

’00

0)

Current Assets

Cash and cash equivalents 17,252 29,577 32,741

Trade and other receivables 1,015 178 95

Other assets 107 96 66

Total Current Assets 18,374 29,851 32,901

Non-Current Assets

Property, plant and equipment 286 537 202

Total Non-Current Assets 286 537 202

Total Assets 18,660 30,388 33,103

Lia

bilit

ies

($’0

00

)

Current Liabilities

Trade and other payables 254 948 6,422

Employee benefits 319 66 28

Other liabilities 16,742 28,885 26,521

Total Current Liabilities 17,315 29,899 32,972

Non-Current Liabilities

Employee benefits 111 20 13

Total Non-Current Liabilities 111 20 13

Total Liabilities 17,426 29,919 32,984

Eq

uit

y ($

’00

0) Net Assets 1,234 469 118

Reserves - 150 -

Retained earnings 1,234 319 118

Total Equity 1,234 469 118

38


Statement of cash flows2014 2013 2012

Cash Flows from Operating Activities $’000

Receipts from government and other funders 7,889 12,746 37,819

Payments to suppliers and employees (8,692) (6,980) (2,180)

transfers to other agencies (12,071) (9,746) (2,831)

Interest received 542 1,319 3

Other receipts 40 52 42

Net cash provided by (used in) operating activities

(12,292) (2,609) 32,853

Cash Flows from Investing Activities $’000

Purchase of property, plant and equipment (47) (567) (112)

Proceeds on disposal of property, plant and equipment

14 12 -

Net cash provided by (used in) investing activities

(33) (555) (112)

Net increase (decrease) in cash and cash equivalents held

(12,325) (3,164) 32,741

Cash and cash equivalents at beginning of financial year

29,577 32,741 -

Cash and cash equivalents at end of financial year

17,252 29,577 32,741

39

Annual Report 2014

Thank you to our major partners Government: ACT GovernmentAustralian Securities and Investments CommissionAustralian Government Department of Human ServicesAustralian Government Department of Social ServicesAustralian Government Department of the TreasuryCentrelinkNew South Wales Office of Fair TradingNorthern Territory GovernmentQueensland GovernmentSouth Australian Government – Department for Communities and Social Inclusion Tasmanian GovernmentVictorian Government Department of Human ServicesWestern Australian Government

Corporate: Bank of New ZealandCatholic Development FundClemenger BBDODeloitte PrivateInsurance Australia GroupNational Australia BankSequel CommunicationsSuncorp GroupThe Good Guys

Fire Services Levy Contributors: AIG Australia LimitedCalliden GroupCatlin Australia Pty LtdHDI - Gerling Industry Insurance CompanyHollard Insurance Company Pty LtdHonan Insurance Group Pty LtdSavannah Insurance Agency Pty LtdSuncorp Metway LtdWillis Australia Group Service

Able Australia ServiceACRO Australian Community Safety & Research Organisation IncorporatedAlbury NILSAnglican Community Care IncorporatedAnglicare Canberra and GoulburnAnglicare Diocese of SydneyAnglicare NTAnglicare SA IncorporatedAnglicare VictoriaAnglicare Western NSWArmidale Neighbourhood Centre IncASCOF LimitedBanana Shire Support CentreBaptistCare NSW & ACTBass Coast NILSBellingen Neighbourhood Centre IncBenalla Community Financial Services IncBendigo Family and Financial Services IncorporatedBlackheath Area Neighbourhood Centre IncBobby Goldsmith Foundation IncBowen Neighbourhood CentreBreak the Cycle Glenquarie IncBridging The Gap Sydney West IncorporatedBrophy Family and Youth Services IncBrotherhood of St LaurenceByron Bay Community Association IncC3 Community Services LtdCancer Council NSW

Canefields Clubhouse Beenleigh IncCardinia Combined Churches Caring IncCare Goondiwindi Association IncCare IncCarers Association of South AustraliaCarers Queensland IncCasey North Community Information and Support ServiceCastlemaine Community House IncCatherine House IncCentacare Catholic Diocese of Ballarat IncCentacare Catholic Family ServicesCentrecorp FoundationCharters Towers Neighbourhood Centre IncChrist Church Inner West Anglican CommunityChristian Community AidChurch of All Nations Welfare AgencyCoast ShelterCoburg Community Information Centre IncCollinsville Community Association IncCombined Churches Caring Melton IncCommunify Queensland LtdCommunity Accommodation & Support Agency IncCommunity Action in Carole Park IncCommunity Care Beenleigh District IncCommunity Hub IncConnectionsCorangamite District Adult Education Group IncCorryong Neighbourhood House

Microfinance heroes We thank the 260 accredited community providers that share our commitment and passion for financial inclusion. Without you, our programs would not be able to reach and positively impact the lives of individuals, families and communities on low incomes across Australia.

Good Shepherd Microfinance acknowledges the continued support of the following partners:

40


Council on the Ageing (SA) IncCranbourne Information and Support Service IncCreating Links Co-operative LtdDandenong Community Advisory Bureau IncDarebin Information Volunteer & Resource Service IncDiversitatDubbo Local Global CareEastern Access Community HealthECHO Inc Youth MinistriesEchuca Neighbourhood House IncEndeavour Ministries IncFamily Emergency Accommodation Townsville IncFinancial Counselling (VIC) IncForesters Community Finance LtdForster Neighbourhood Centre IncGateway Community Group IncGeorge Street Neighbourhood Centre Association IncGlebe Assistance & Patnership ProgramGood Shepherd Youth & Family Service IncGoodna Neighbourhood HouseGosford Community & Information Service LtdGoulburn Valley Family Care IncGraham House Community Centre IncGunya Meta IncHighlands Community Centres IncHope Connect IncHunter Region No Interest Loans Scheme IncHut Community Centre Inc [The]Indigenous Consumer Assistance Network LtdInner Northern Community Housing (Brisbane) Association IncInspire Community Services IncInspiroIntereach LtdIpswich Housing and Support Services IncIslamic Council of Victoria IncJosephite FoundationKangaroo Flat Community Group IncKempsey Neighbourhood Centre IncKenalwyn Bundaberg and District Neighbourhood Centre IncKildonan UnitingCareKnox Infolink IncKuranda Neighbourhood CentreKyabra Community Association IncKyneton Community & Learning Centre IncLaidley and Districts Community Organisation, IncLandsborough Area Community Association, IncLentara UnitingCareLismore Neighbourhood Centre IncLogan East Community Neighbourhood Association IncorporatedLower Mountains Neighbourhood Centre IncMacarthur Diversity Services Initiative LtdMacarthur NILSManning Support Services IncMareeba Information & Support Centre IncMaryborough Community House IncMercy Community Services IncMetro AssistMid Mountains Neighbourhood Centre IncMornington Community Information & Support Centre IncMount Isa Family Support Service & Neighbourhood Centre IncMt Beauty Neighbourhood Centre IncMTC AustraliaMultiLink Community Services IncMurilla Community Centre IncMuru Mittigar Aboriginal Cultural & Education CentreMuscular Dystrophy Association of QueenslandNambucca Valley Community Services Council IncNorth East NILS IncNorthern Illawara Community Connections IncNQ Community ServicesOdyssey House VictoriaOzchild

Peninsula Christian CarePine Rivers Neighbourhood Association IncPort Douglas Neighbourhood CentrePort Kembla Community Project IncPort Phillip Community Group LtdPositive Life South Australia IncProserpine Community CentreQuantum Support Services IncRavenshoe Community Centre IncRedland Community Centre IncRosemount Good Shepherd Youth & Family ServicesSalisbury Community Organising Against Poverty IncSalvation Army (Victoria) Property TrustSalvation Army LeongathaSeeds of Hope Community Services LtdShelter Housing Action Cairns Association IncSomerville Community ServicesSouthern Family Life Service Association IncSouthern Peninsula Community Support & Information CentreSpectrum MRC NILSSpringvale Community Aid and Advice BureauSt Luke’s AnglicareSt Margaret’s Anglican ChurchSt Marys Area NILSSt Peter’s Community Service FundSt Vincent de Paul Society NSWSt Vincent de Paul Society QueenslandSt Vincent de Paul Society Victoria IncSwan Hill Neighbourhood House IncTableland Women’s Centre IncorporatedTara & District Family Support Committee IncThe Hills Community Aid and Information Service Inc The Neighbours Place IncThe NILS Network of Tasmania The Parks Community Network Inc The Salvation Army Eastern Territory The Salvation Army, Arndale Community Support Services The Salvation Army, Mount Gambier Corps The Uniting Church in Australia Property Trust (NSW) Thornbury Women’s Neighbourhood HouseToukley Neighbourhood CentreTravellers Aid AustraliaTrustees of the Sisters of St DominicTrustees of the Sisters of St JosephUCare Gawler IncUniting CommunitiesUnitingCare Adelaide EastUnitingCare East Burwood CentreUnitingCare GeelongUnitingCare Wesley BowdenUnitingCare Wesley Country SA IncUnitingCare Wesley Port Adelaide IncorporatedUnitingCare WodongaUpper Murray Family Care IncWA Low Interest Loans Network Inc.WA No Interest Loans Network IncWedderburn Community House Inc.Weipa Community Care Association IncWesley Footscray OutreachWesley Mission BrisbaneWhitsunday Community Services IncWhitsunday Crisis & Counselling Services IncWimmera Family Violence NILSWimmera UnitingCareWindsor District Baptist Church Emergency Relief IncWinmalee Neighbourhood Centre IncWiradjuri Aboriginal Corporation Community & Childcare CentreWomen’s Centre for Health and Wellbeing (Albury-Wodonga) IncWomen’s Health Goulburn North East

41

Annual Report 2014

Photo: Candiannd and her son Sean, NILS client, Good Money Dandenong42


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Fundraise You can organise and run your own fundraising event for Good Shepherd Microfinance.

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Become a corporate partnerHelp us to impact even more lives by becoming a corporate partner providing financial support,

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Good Shepherd Australia New Zealand Good Shepherd Microfinance is part of the of Good Shepherd Australia New Zealand network, which was established by the Sisters of the Good Shepherd.

Good Shepherd Australia New Zealand was established to ensure the continuity and growth of the Good Shepherd mission in Australia and New Zealand following 150 years of history.

Its priority and focus is disadvantaged and marginalised women and girls – a commitment first made by Saint Mary Euphrasia who founded the Good Shepherd Sisters in France in 1835.

43

Annual Report 2014

Good Shepherd MicrofinanceGround Floor, 192 - 198 High Street Northcote, Victoria, 3070Phone: 03 9495 9600goodshepherdmicrofinance.org.au

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a life journey - Good Shepherd Microfinancegoodshepherdmicrofinance.org.au/assets/files/2016/... · For all of us, life is a journey. The path is often not clear and is challenging