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
Licensee Centrepoint Alliance has completed the acquisition of Brighter Super’s annual review service advice book, via Financial Advice Matters.
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
