Posted 11 months ago
Helping people achieve financial independence and inclusion is a lifelong passion for Corinne Proske, Speckle’s General Manager for Retail and Online. We took the opportunity to sit down with Corinne for a candid discussion about her work, financial empowerment, and Speckle’s mission:
Speckle: Thanks so much for taking the time to speak with us today, Corinne.
CP: No problem at all. Thank you for the opportunity.
Speckle: Let’s start by getting a bit of background about yourself. How did you come to be involved in the Not for Profit Finance sector?
CP: Several years ago I found myself the victim of a financially abusive relationship. Never in my wildest dreams did I imagine myself pregnant, straining under mountains of debt that was not mine and desperately counting pennies. A few months later, now the mother of a newborn child, I had little choice but to return to work far earlier than I had planned to gain some financial security. The feelings of panic and helplessness that came with being robbed of my financial independence was beyond oppressive. It made me realise that anyone can fall on hard times and created a passion that has driven me to help others in stressful situations.
Speckle: What happened next?
CP: I spent the bulk of my career working with one of the Big 4 banks, specialising in the area of community finance, development and corporate responsibility. This experience put me in a position to interact with others in financial difficulties. The more first-hand experience I obtained of just how harshly so many people in Australia struggle to achieve financial stability and inclusion, the more it became clear that there had to be another option
Speckle: What do you mean by “financial inclusion”?
CP: Banks and mainstream financial institutions won’t lend to people with low incomes or bad credit. Such families and individuals are therefore excluded from participating fully in the economy. This forces far too many into the waiting arms of unethical payday lenders, who are only too happy to rope them into a cycle of debt that may take years from which to emerge. This gross imbalance of power between lenders and borrowers is a source of pain and misery for so many in this country. Having previously found myself in such a position, I knew only too well how tough many families are doing it through no fault of their own.
Speckle: But not everyone is a victim of financial abuse. How does this relate to ordinary families?
CP: That’s true. However, in my work, I was shocked to learn that half of our population have less than 3-months’ salary worth of cash in savings. Even worse, 1 in 7 have no savings at all and are literally living paycheck to paycheck. Meanwhile, a staggering 2.4 million people in Australia report having experienced financial stress in the past year. It doesn’t take a rocket scientist to realise that there is going to be significant overlap between those two figures. How are those suffering from hardship supposed to weather the storm without savings upon which to fall back? It was during that time that I came up with the kernel of an idea that I thought might provide a solution.
Speckle: What was that?
CP: I was familiar with the amazing work that microfinance providers do from work I had done previously in developing countries such as India, Thailand and the Philippines. Using that as a template, I figured it must be possible to create an ethical model to compete with Payday lenders and offer struggling families an alternative.
Speckle: I see. So, why are Payday Lenders such a problem?
CP: While they are perfectly legal and offer convenient assistance for some, many payday loans come at a very high cost for the borrower. Virtually all lenders charge the maximum level of monthly fees allowable by law and rope customers in with inflexible repayment conditions and exorbitant penalties for not meeting them precisely. In far too many cases, the actual amount that the borrower repays can be many times more than the value of the initial loan. Already struggling households may end up still paying them off years after the conclusion of the original term.
Speckle: So, what’s the alternative?
CP: I played around with various models, technologies and business cases until I finally landed on the idea that would later become Speckle. I presented this to the NAB and received the funding to pursue the concept. A little while later we developed a partnership with Good Shepherd Microfinance and all of a sudden the dream was starting to take shape. Our objective is to provide working individuals or families with access to fast, small loans that are fair and manageable. I’ve come to realise that while money is certainly not everything, it represents freedom and opportunity for so many. Whether you’re a street peddler in Manila or a secretary in Sydney, the ability to obtain funds when you need them, without locking yourself into a world of painful, ongoing debt, can give you the power to achieve security and prosperity.
Speckle: How is a Speckle Loan different to a payday loan?
CP: On the surface, the two look somewhat similar. Speckle offers up to $2000 in cash loans online with fewer hoops through which to jump. The money is usually in the borrowers account within two days. That’s about where the resemblance ends. A Speckle Loan comes with a 10% establishment fee and only 2% monthly fee, that’s about half of what you can expect to pay with most payday lenders.
Speckle: What happens if a customer is struggling to make the repayments?
CP: This is where many people get into serious trouble with payday lenders. Unscrupulous organisations see this as an opportunity to profit from the hardship of others by slugging borrowers with huge fees and charges for late or missed payments, often keeping them in debt for years. At Speckle, if a customer is having trouble, all they need to do is call us, and we’ll be happy to discuss an alternative arrangement that will work for everyone. We do charge dishonour and default fees where a borrower fails to meet his or her obligations, but we keep these to an absolute minimum. We’re not interested in making money from people’s difficulties. Those nominal fees are only there to help us cover our costs. Speckle exists to empower and assist people in their lives, rather than to make a quick profit. On the other side of the spectrum, if a borrower finds themselves in the happy position of being able to pay the loan off more quickly than expected, they can do that without incurring any penalties or extra charges.
Speckle: Can anyone access a Speckle Loan?
CP: Our goal is not to hand out cheap money to just anyone. For Speckle to be a viable option, customers do need to meet some minimum criteria. To be eligible for a Speckle Loan, a borrower must have a minimum annual income of $30,000 exclusive of Centrelink payments and receive less than 50% of their total income from government benefits. We also stipulate that you must have taken out no more than one small amount credit contracts within the previous 90 days. Other than that, if you’re an Australian citizen or permanent resident and can provide the required documentation, you can have anything between $200-$2000 in your account in as little as 48 hours.
Speckle: What do you think the future holds for the microfinance industry in Australia.
CP: The prevailing economic conditions that have led us to this situation show no signs of slowing. People all over Australia are likely to continue to need access to short-term funds to assist with managing when times are tough. We hope that Speckle’s fair loans will play a leading part in changing the game and helping as many as possible attain financial stability and independence. We see hard-working people in turmoil and struggling to get ahead every day. For these folks, Speckle represents a welcome opportunity that many will be only too glad to make the most of. As a project of Good Shepherd Microfinance that is backed by NAB, Speckle has the solid foundation that should instil trust and confidence in our customers. We see ourselves becoming the new standard of microfinance in Australia.
Speckle: Thank you so much for your fascinating insights.
CP: My pleasure. Any time.