Speckle is a new online cash loan business run by not-for-profit group Good Shepherd Microfinance, which is backed by NAB.
The online platform claims to be “up to 50 per cent cheaper” than most small cash loans and offers small loans of between $200 and $2,000 with repayment options ranging from three months to one year. The loans are subject to an establishment fee (10 per cent of the principal) and a monthly fee (2 per cent of the initial loan amount).
Speckle also has a dishonour fee ($5) and a default fee (set at $1 a day) for loans that are not repaid for more than 30 days.
To be eligible for a Speckle loan, applicants must be over 18, be an Australian citizen or Permanent Resident, earn more than $30,000 a year (not inclusive of government benefits), have no more than 50 per cent of their total income from government benefits and can’t have had two or more small amount credit contracts in the last 90 days.
The platform was launched after Good Shepherd Microfinance noted that a rising cost of living and low wage growth were pushing more consumers to use payday loans and identified a need to develop a “low-cost” cash loan product.
Adam Mooney, CEO at Good Shepherd Microfinance, commented: “Every day, we see the negative impact of high-cost loans on individuals and families. In addition, the latest research shows that the number of women using short-term cash loans continues to increase and women tend to use these loans at an earlier age than men.
“It was clear that we needed a better solution for anyone who needs to use small cash loans. Speckle will enable people to access lower-cost credit when they need it most.”
NAB CEO Andrew Thorburn said that the bank shares Good Shepherd Microfinance’s mission to create “fair and affordable” financial products that address the gaps in the market.
“We know there are many people who, because of their financial situation, don’t typically qualify for mainstream finance, and are having to turn to payday loans. We’ve worked with our long-term partner Good Shepherd Microfinance to develop Speckle as a better alternative.
“At NAB, we want to support people to improve their financial resilience so if times get tough they can bounce back better. It’s important that everyone can access appropriate credit.”
The big four bank has been working with Good Shepherd Microfinance for the past 15 years, and the partnership has so far provided more than $212 million to Australians in no interest and low interest loans.
[Related: ASIC announces payday lending changes]
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Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.