Multimillion-dollar boost to financial service providers

Social Development Minister Carmel Sepuloni. Photo / File

A multimillion-dollar boost to financial service providers to help Kiwis manage their money and build financial resilience has been announced.

The Ministry of Social Development (MSD) has funded a $35m boost to financial capability service providers.

Social Development Minister Carmel Sepuloni announced today in a media release that the fund would help New Zealanders manage their money better both day-to-day and through periods of financial difficulty.

"It's always been our position to increase support to key groups experiencing or at risk of experiencing hardship by strengthening Building Financial Capability (BFC) services.

She said $9.7m will go towards a general funding top-up of around 20 per cent to the rate so BFC providers can continue to support the 35,000 clients they see each year.

This follows on from the Budget announcement that money was being invested in building financial capability service providers in support of demand for their services, the release said.

She said on top of existing pressures on services, a significant increase in demand for budgeting services is expected in the economic downturn from Covid-19 with some households living on a reduced income.

An extra $25m worth of funding will be rolled out to 131 existing services.

The extra funding will go towards Financial Mentoring, MoneyMates, Building Financial Capability Plus (Kahukura) service and Micro-finance services.

"Social services are key to helping us support New Zealanders and improve wellbeing in our communities," Sepuloni said.

She said budgeting services played a vital role in providing help and advice to those struggling financially and facing problem debt.

"Rebuilding New Zealand means building financial resilience now and in the long-term so New Zealanders are well equipped and supported to look after their finances, and take care of themselves and their families."

Where the extra $25m funding will go

• Financial Mentoring: one-to-one support empowering people to achieve their goals, including reduce debt and connect to support they may need.
• MoneyMates: peer-led support for people to learn and share as a group.
• Building Financial Capability Plus (Kahukura) service: intensive support for those who are hard to reach or with complex needs.
• Micro-finance services: affordable credit to people at risk of unsustainable debt and hardship."