Call for industry co-funding to support essential work of financial mentors
FinCap has released a paper on industry co-funding to support the essential work of financial mentors across Aotearoa.
Financial mentors work hard daily to provide a 'fence at the top of the cliff' for whānau experiencing financial difficulty or struggling with debt repayment. Financial mentors often prevent these challenges from spiralling into ongoing non-payment, or deteriorating physical health, mental health and social cohesion.
FinCap's Support for financial mentoring in Aotearoa New Zealand paper presents analysis and recommendations for a $25m contribution from industries that benefit from the work of financial mentors across Aotearoa. Industry contribution to a portion of the $30.5m funding gap can keep this essential work accessible to whānau in financial difficulty.
FinCap is also calling for the government's contribution to increase, bringing the total funding for the sector up to $50m.
Often the challenges facing whānau involve consumer debt and navigating debt repayments. In Aotearoa, lenders are required to refer their customers to free financial mentoring services under the Credit Contracts and Consumer Finance Act 2003. These businesses including banking, lending, KiwiSaver, financial services, energy and telecommunications providers, are major contributors to demand for financial mentoring and benefit in multiple ways when customers receive financial mentoring. Voluntary industry contributions can help continued access to the essential work that financial mentors provide their mutual clients.
KiwiSaver providers rely on financial mentors to assist many of their customers in navigating hardship withdrawals. A recent FinCap survey found that financial mentors spend 40% of their time on KiwiSaver withdrawal applications.
