Monday, February 23, 2004

Not a "poor person's bank"

Jim Anderton's famous "people's bank", set up to provide wider access to banking services for people on lower incomes, is denying home loans to low-earners - who are then being welcomed at mainstream banks.

The problem it seems is that they are not counting benefits as income for the purposes of working out how much you can borrow. But every other bank is perfectly happy to. As a result, the very people they were established to serve are being forced to look elsewhere.

Now, there are other banking services besides loans. Being able to just get an account that doesn't rape you for fees is important. But being able to get a mortgage, own your own home, and build your own equity is vastly more important to the dreams of most New Zealanders. That KiwiBank is failing to help in this area when its competitors are is a basic failure in its mission.

For once, Rodney Hide is right - the whole rationale of the bank is in tatters. It was set up to help the poor; it's not doing it properly. Time to put a bit of stick about?