I was trawling the web and came across a church in southern New Zealand that has an interesting (pardon the pun) approach to money lending. This is what they have to say:
"People on low incomes are considered high credit risks. So they often
seek credit elsewhere with high interest rates (even higher than 40 per
cent) and enter a never-ending debt spiral. They are unable to repay the
principal debt because of the high interest payments.
budgeting process, sometimes Kingdom Resources can assist people in
need with debt restructuring, lending money interest-free, over a
manageable time period. Knowing that someone has trusted them enough to
lend them money interest-free, plus the budget advice they receive, is a
huge boost to Kingdom Resources’ clients."
Interest-free loans sounds like a crazy idea. This idea is fascinating to me, and flies in the face of accepted financial wisdom in the world. So far, this service has been running since 1988, and their loans total 3.1 million dollars. Is there a way to bank and manage money in the community that is radically different from what world banks are selling us? Is it possible that many banks have become blinded by their own greed rather than the people's need?
Your thoughts please.