Three million Australians “financially excluded”
The financial services system is letting down a sizable proportion of low income-earning Australians, with more than three million unable to access a moderate line of credit, a report says.
The number of “financially excluded” Australians - defined by poor access to credit, transaction accounts and general insurance - grew to three million in 2013 - around 17 per cent of the adult population, according to the NAB and Centre for Social Impact report.
While just 1 per cent of the population had absolutely no financial services products, more than 15 per cent had just one, which classes them as financially excluded, based on NAB’s classification.
Among the cohort, more than 40 per cent were employed, the report showed.
But further investigations are needed to determine what precisely is stopping these Australians from accessing mainstream credit products, NAB and lending group Good Shepherd Microfinance said.
“Those excluded from mainstream credit are often forced to turn to fringe lenders and can find it difficult to manage basic payments, getting caught in a cycle of debt,” NAB group executive, personal banking, Gavin Slater said.
Good Shepherd Microfinance CEO, Adam Mooney, added: “This issue is not going away and the Financial Services Inquiry provides a unique opportunity to understand how many people are accessing this type of lending and how we can work together with industry and government to provide fair and affordable alternatives.”
Recommended for you
The top five licensees are demonstrating a “strong recovery” from losses in the first half of the year, and the gap is narrowing between their respective adviser numbers.
With many advisers preparing to retire or sell up, business advisory firm Business Health believes advisers need to take a proactive approach to informing their clients of succession plans.
Retirement commentators have flagged that almost a third of Australians over 50 are unprepared for the longevity of retirement and are falling behind APAC peers in their preparations and advice engagement.
As private markets continue to garner investor interest, Netwealth’s series of private market reports have revealed how much advisers and wealth managers are allocating, as well as a growing attraction to evergreen funds.
