No Interest Loan Scheme (NILS)

Overview and Background

NILS is a safe and affordable credit alternative. It is a program that provides small loans to people on low incomes without any fees, charges or interest payments during the loan process or loan cycle. Furthermore, no form of security over the NILS loan is allowed. This includes the use of the goods purchased with the loan.

NILS is exempt under the National Consumer Credit Protection Act 2009 (Cth) because there are no fees, costs or interest associated with NILS loans. Any costs associated with a NILS loan would be interpreted as interest under this act. To best ensure responsible lending, a list of rights and responsibilities has been developed.

NILS was developed in 1981 by the Good Shepherd Sisters and has since grown beyond Victoria to all Australian states and territories, and in 2014 to New Zealand. Since 2007, the National Australia Bank (NAB) has been providing loan capital to accredited NILS Providers.

The NILS loans process is based on dignity and respect, and underpinned by the Circular Community Credit model. When a borrower makes a repayment, those funds then become available for more loans in that community.

Good Shepherd Micro Finance

NILS is a registered trademark that can be used under license by programs that are registered or accredited by Good Shepherd Microfinance to deliver NILS.

In  addition to access to safe, affordable credit for people living on low incomes, the value of the NILS program comes from borrowers building their financial capability and confidence through the experience of applying for a loan and successfully meeting their repayment obligations.

A Client Support Provider is registered to promote NILS and to assist eligible people to apply for NILS loan. Client Support Providers conduct NILS loan interviews (financial conversations), gather the necessary information and authority from the applicant, and submit the application to a Loan Provider for assessment and ongoing loan management.

A Loan Provider is accredited to provide client support and undertake the ongoing management of loans, from assessment to loan completion, including follow up of loans not currently paying. Both Client Support Providers and Loan Providers must continue to meet standards and fulfil obligations to remain registered or accredited Nils Providers.