Vila Times

Pacific families ‘trapped’ with high-interest loans in NZ

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Monte Cecilia Housing Trust’s chief executive is calling for more to be done to increase the financial literacy of south Auckland’s Pacific community, reports. Its leaders need to “stand up and be counted” on the issue, he says.

“Our Pacific families are stuck between a rock and a hard place.

“Many come to New Zealand and are not housed, but they need to be housed to get a job.

“To be employed and get to their job they need transport, so they buy a car.

“Often because they don’t have credit, or have bad debt, they get into these high-interest loans. It’s a trap.”

Pacific people made up almost 70 per cent of the trust’s 545 client families last year.

The Māngere-based trust supports low-income families to find affordable housing.

It also provides them with housing advice and referral services and offers accommodation at its facility for up to three months.

In that time the families contribute to a savings programme, develop household management skills, and receive family support services.

Smith says interviews with 30 families the trust has provided with social housing found they had an average debt of $16,000.

The highest debt one family had was $70,000.

He says Pacific families feel cultural obligations to donate money to their church, and to weddings and funerals.

“They have a commitment to support family back home in Samoa or Tonga.

“We say rather than send $400 or $500, why don’t you send $40 or $50?”

Smith says he’s seen Pacific families take out loans to pay their rent.

All some of them need is to have their rent increased by $10 a week to go into debt, he says.