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Developing responsible banking products

bankmecu products and services aim to be economically, socially and environmentally responsible wherever possible. This is reflected in our product development process, which is guided by the Bank’s:

  • Responsible Investment and Lending Policy
  • Financial Inclusion Policy
  • Environment Policy
  • Product Development Process Procedure
  • Procurement Policy.

Global Alliance for Banking on Values

This year we began using criteria developed by GABV to help our understanding of classifying loans according to their impact on people, planet and prosperity, as defined by the Alliance. Some loans may meet multiple criteria, but are only recorded once.

People

People related loans finance social empowerment enterprises or projects delivering activities among others such as education, health care, social inclusion, arts and culture, or special needs housing. bankmecu has expertise in commercial lending into the affordable housing, community and disability sectors. These loans accounted for 4.7% of our total loan portfolio and more than 50% of our commercial loan portfolio. These loans qualified as triple bottom line (TBL) assets because they were made to organisations helping disadvantaged people in our community.

Planet

Planet related loans finance environmental protection or enhancement enterprises or projects in areas such as renewable energy, energy efficiency or retrofits, ‘green’ oriented housing or buildings, waste or pollution reduction, water efficiency and access, or sustainable agriculture. These loans accounted for 6.5% of our total loan portfolio.

bankmecu has several products that positively affect the environment:

  • goGreen Home Loans finance buildings with an energy rating above a stipulated minimum.
  • We offset the loss of biodiversity for all construction loans by protecting land equal to the building lot in the Conservation Landbank, our private nature reserve. We financed 128 new home construction loans in 2014, valued at $43.5 million. In 2014 bankmecu offset 86,907m2 in the Conservation Landbank (504,529m2 since 1 December 2008).
  • goGreen Car Loans encourage customers to purchase lower emission vehicles or vehicles with a high safety rating. We also offset the carbon dioxide emissions from all vehicles purchased for the life of the car loan. We financed 973 goGreen car loans in 2014, valued at $19.6 million. bankmecu offset 8,836 tonnes in 2014 into the Conservation Landbank (57,799 tonnes of carbon equivalents since 1 January 2008). This is equivalent to taking 14,450 cars off the road for a year.
  • We offer personal loans that provide lower interest rates for customers performing sustainable renovations or home improvements.

Prosperity

Prosperity loans finance economic security enterprises or projects delivering activities such as micro‑finance for micro-enterprises, or economic inclusion. bankmecu is currently involved in two such initiatives:

  • The ACT Land Rent Scheme helps lower income households to build new homes by allowing them to rent rather than buy land, which is very expensive. By building on rented land, people can take out smaller loans to cover construction making it more affordable. The Bank advanced 33 loans valued at $9.3 million under this scheme.
  • bankmecu partnered with the South Australian Government’s initiative HomeStart Finance and Adelaide City Council to provide finance under a shared equity arrangement. Under the scheme, Adelaide City Council provides customers a shared equity loan to purchase an apartment, which is only repaid when the apartment is sold. Eligibility is restricted to borrowers with limited income, with the balance of the purchase price financed by HomeStart or bankmecu. We financed 14 loans valued at $2.5 million this year.

Additional product features

bankmecu products have several other socially and environmentally responsible features:

  • Young driver safety rebate. We offer a rebate of $200 for car loan borrowers aged 25 and under who take an advanced driving course.
  • Environmental loan repayment pause. This home loan feature encourages customers to install energy and water efficient appliances within the home. We approved seven repayment pauses in 2014, valued at over $30,426.
  • Family loan repayment pause. This home loan feature allows customers to pause payments when a new child enters a family. We approved 47 repayment pauses in 2014, with an average deferment in repayments of $5,843.
  • bankmecu Super. We added Perpetual Wholesale Ethical SRI Fund as an investment option this year, which aims to provide long term capital growth and income by investing in shares of socially responsible companies.