value of lending with an environmental and social benefit
bankmecu defines ‘total value of lending with an environmental and social benefit’ as lending to customers and organisations where the outcome improves the environment and/or social capacity and circumstance.
bankmecu has developed loan products with specific environmental and social benefits. Individual loans with positive environmental and social benefits are also identified. Generally, bankmecu’s predominant lending to support residential housing and investment has a social value but this is not counted within this metric.
Figure 7b: bankmecu loans with environmental and social benefit in 2010/11
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Environmental
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Balances
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$47,133,857
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Number of accounts
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2,456
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% of portfolio
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2.16%
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Social
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|
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Balances
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$432,014,746
|
|
Number of accounts
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1,604
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% of portfolio
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19.77%
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Other
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|
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Balances
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$1,706,390,471
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|
Number of accounts
|
42,044
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% of portfolio
|
78.08%
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Most of the loans in the environmental class are personal loans or car loans. Balances in these loan types have reduced over the past 12 months in line with the general reduction in personal lending experienced at bankmecu and in the wider marketplace, however, the decrease was at a much lower rate compared to the total personal and car loan portfolio.
In 2010 the balance of environmental loans that were personal loans was $30.8m, and this fell to $26.9m in 2011 - a reduction of 13%. The total personal loan portfolio fell by 24% over the same period. This reduction is a result of more customers financing traditional personal loans purchases via home loans and increased competition from car dealer financiers.
Lending with a social benefit has increased 18.4%, largely due to the Premium First Home Buyer Loan and lending to the community sector, particularly affordable housing.