5.4.2
Fostering a sense of self-sufficiency
and giving back
microfinance models applied to the provision of
private rental support. The key lessons learned for
the program has been the need for an ‘open door
approach’ where the initial assessment provides
sufficient guidance to help stabilise a client’s
situation before taking on the responsibility of the
loan. However, there will be a proportion of clients
who will not be suitable for a loan nor will they be
prepared to pay it back. The granting of a loan
needs to be carefully assessed for suitability and
monitored over time to ensure that the tenant
does not face additional hardship from adding to
an already stretched budget. It is also critical that it
is only one part of a package of private rental and
social housing assistance. As reflected by one
stakeholder
The notion of ‘circular credit’ models of finance is
that the money invested can be reused to continue
to support others. Actively promoting this aspect
of the loan appeared to be effective in tapping into
clients’ altruistic motivations for repaying the loan.
Clients, staff and external stakeholders consulted
all acknowledged that loans can be beneficial in
helping to promote self-sufficiency; a finding that
is consistent within the broader microfinance
literature discussed in section 2. All clients
interviewed were supportive of the principles of
borrowing and to some degree receiving a loan
was reported to help them to maintain a sense of
pride, rather than feeling like a ‘charity case’.
Moreover, clients reported having satisfaction in
knowing that as they repay their loan someone
else can benefit.
This model is not suitable for everybody
as people have to be able to pay back a
loan and therefore it needs to be very
well targeted based on strict criteria. It is
very tricky to decide who gets the
funding. It does need to operate within a
business framework to some extent as the
money has to come back to ensure that
others can continue to be assisted. This
type of program needs to sit alongside
socially funded housing as it can only
target those who can and are prepared to
repay. It is critical that there continue to
be a range of housing options [External
stakeholder].
I wanted to pay it off as quick as
possible so someone else could get the
help [Client interview]
I have been happy to pay back the
loan. I think it is good because you can
keep accessing financial support once
you have paid back the loan – it is not a
once off thing. You can keep coming
back to the service. Here is really good
– I am very happy to come here [Client
interview].
The program is good I am happy to pay
back the loan because it means you are
able to give back and someone else can
then be helped and keep building the
funds [Client interview].
The initial evidence from both the service activity
data and consultation feedback is that WCC have
managed the allocation process well. As the
program progressed, clear policies and procedures
have been implemented and refined based on the
lessons learned on how to best assess for
suitability for a loan. For instance, it was
established that the program cannot provide
financial assistance to single persons in receipt of
Newstart or households with unstable incomes or
where income or cash flow might vary from week
to week unless they are able to share a proportion
of the housing costs with someone else. Both WCC
staff and external stakeholders expressed concern
that single people on Newstart are increasingly
forced out of the private rental sector and are not
being adequately ‘picked up’ in the broader service
system response.
The critical lesson learned for the program and
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