Research Reports and Evaluations - Page 31

5.4.2 Fostering a sense of self-sufficiency and giving back microfinance models applied to the provision of private rental support. The key lessons learned for the program has been the need for an ‘open door approach’ where the initial assessment provides sufficient guidance to help stabilise a client’s situation before taking on the responsibility of the loan. However, there will be a proportion of clients who will not be suitable for a loan nor will they be prepared to pay it back. The granting of a loan needs to be carefully assessed for suitability and monitored over time to ensure that the tenant does not face additional hardship from adding to an already stretched budget. It is also critical that it is only one part of a package of private rental and social housing assistance. As reflected by one stakeholder The notion of ‘circular credit’ models of finance is that the money invested can be reused to continue to support others. Actively promoting this aspect of the loan appeared to be effective in tapping into clients’ altruistic motivations for repaying the loan. Clients, staff and external stakeholders consulted all acknowledged that loans can be beneficial in helping to promote self-sufficiency; a finding that is consistent within the broader microfinance literature discussed in section 2. All clients interviewed were supportive of the principles of borrowing and to some degree receiving a loan was reported to help them to maintain a sense of pride, rather than feeling like a ‘charity case’. Moreover, clients reported having satisfaction in knowing that as they repay their loan someone else can benefit. This model is not suitable for everybody as people have to be able to pay back a loan and therefore it needs to be very well targeted based on strict criteria. It is very tricky to decide who gets the funding. It does need to operate within a business framework to some extent as the money has to come back to ensure that others can continue to be assisted. This type of program needs to sit alongside socially funded housing as it can only target those who can and are prepared to repay. It is critical that there continue to be a range of housing options [External stakeholder]. I wanted to pay it off as quick as possible so someone else could get the help [Client interview] I have been happy to pay back the loan. I think it is good because you can keep accessing financial support once you have paid back the loan – it is not a once off thing. You can keep coming back to the service. Here is really good – I am very happy to come here [Client interview]. The program is good I am happy to pay back the loan because it means you are able to give back and someone else can then be helped and keep building the funds [Client interview]. The initial evidence from both the service activity data and consultation feedback is that WCC have managed the allocation process well. As the program progressed, clear policies and procedures have been implemented and refined based on the lessons learned on how to best assess for suitability for a loan. For instance, it was established that the program cannot provide financial assistance to single persons in receipt of Newstart or households with unstable incomes or where income or cash flow might vary from week to week unless they are able to share a proportion of the housing costs with someone else. Both WCC staff and external stakeholders expressed concern that single people on Newstart are increasingly forced out of the private rental sector and are not being adequately ‘picked up’ in the broader service system response. The critical lesson learned for the program and priva є