Labor has pledged $60m for financial services that divert vulnerable borrowers from high-interest payday lenders.
The policy picks up on the recommendation of a Senate inquiry to expand no interest loans schemes to prevent low-income Australians being plunged into a cycle of debt due to unexpected expenses such as medical procedures and broken household appliances.
Labors plan would deliver $15m a year for four years to Good Shepherd Microfinance to expand its services. Good Shepherd estimates the funding will allow it to provide 76,800 low-cost loans each year to Australians in financial hardship.
The Senate inquiry heard that in the worst cases, financial products such as consumer leases slug consumers with effective interest rates o…