Talk economics and finance to some people and it’s almost a ticket to an early bedtime.
But for Dr Ingrid Burkett, a lecturer in community development at The University of Queensland, delving into the world of microfinance uncovered an intriguing world rarely talked about.
“Microfinance is a set of tools, approaches and strategies which have grown up around addressing the financial needs of people in poverty,” Ms Burkett said.
“It is also a world where people in poor economic circumstances are excluded from or disadvantaged in the mainstream banking and finance systems.
“People, because of their financial situation, are forced to seek alternative sources of finance that can often do more harm than good.”
Ms Burkett’s report titled Microfinance in Australia: Current Realities and Future Possibilities, was financed by the Westpac Foundation and is the first comprehensive look at banking on the margins of our society.
With Australians racking up one of the highest personal debt in the world, Ms Burkett said it was often the poor who were worst affected and could least afford it.
“Because they can’t access mainstream credit they are forced to seek out pay-day lenders, pawn brokers, cheque cashers and loan sharks,” she said.
“These avenues can often charge enormous amounts of interest that just drive them further into debt trouble rather than help them out.”
She said a number of microfinance projects had begun in Australia but more work needed to be done, a timely call with this being national Anti-Poverty Week.
“There is the concept of matched savings schemes as the one recently proposed by the Federal opposition treasurer Mark Latham that would assist people on low incomes to save for goals,” Ms Burkett said.
She said microfinance in Australia was still in its infancy and policy makers could learn valuable lessons from experiences overseas as well as develop innovative solutions themselves.
Media: For more information contact Dr Ingrid Burkett (telephone 07 3365 2316) or Andrew Dunne, UQ Communications (telephone 07 3365 2802).
