LENDING based on character assessment is not the norm in Australia but Many Rivers – the new branch of Opportunity International Australia (OIA) – is adopting this method to provide its micro finance services to indigenous Western Australians.
LENDING based on character assessment is not the norm in Australia but Many Rivers – the new branch of Opportunity International Australia (OIA) – is adopting this method to provide its micro finance services to indigenous Western Australians.
To open in March, the Perth office will be the second for Many Rivers in Australia, following last year’s opening of the organisation’s primary office in Grafton, NSW.
Many Rivers state manager Dashan Jeyabalan said that, while OIA had typically focused on providing credit to people in developing countries such as India, Nepal and Indonesia, it was a natural progression for OIA to extend its services to indigenous Australians.
Many Rivers has the backing of strategic partners Mission Australia and Westpac, while Atlas Iron managing director and 2009 40under40 1st Amongst Equals winner David Flanagan has recently been enlisted as an ambassador.
Mr Flanagan told WA Business News it wasn’t just the appeal of a charity organisation that was offering something more than a handout that enticed him to support Many Rivers.
His grandfather was a Polish war refugee who came to Australia with nothing but his craft as a tailor.
After working as a labourer, he was given a sewing machine by a stranger. That enabled him to start a tailoring business with the machine, which he used to repay the debt.
“It was out of the goodness of his heart and it was basically micro lending,” Mr Flanagan said, commenting on why Many Rivers’ personal appeal resonated with him.
Mr Flanagan and Atlas company secretary Tony Walsh are both involved with the organisation and will embark upon hands-on leadership based roles as ambassadors.
By expanding the organisation’s contacts in WA and generating financial support, Messrs Flanagan and Walsh aim to raise $1.8 million by the time of the launch in March.
“It is about diversifying business contacts and relationships within WA for the organisation and ultimately adding credibility to the brand,” Mr Flanagan said.
As far as the character assessment-based system goes, “the poor can’t be trusted is old thinking. Many Rivers thinks they can,” Mr Jeyabalan said, commenting on the ethos behind the microfinance organisation.
He said what the impoverished needed was a hand up, with Many Rivers’ criteria for applicants either having a business idea prior to application or having a business going already has been successful.
In NSW, Many Rivers has a 98 per cent payback rate on loans.
The theory is proving successful in other ways as well.
The organisation supported 330 people in NSW with $150,000 worth of micro financing during the past year, resulting in increased income and decreased welfare dependency.
However, the organisation’s work is not without challenge.
Australia’s welfare mentality is one of the major hurdles facing the organisation, according to Mr Jeyabalan, but the poverty statistics among the Aboriginal community are enough to show the importance of tackling welfare issues.
