Many low income families are trapped in a cycle of poverty, because they are burdened with debts they're struggling to pay off, say anti-poverty advocates and non-government organisations.
The groups - which were part of a hui about poverty at Auckland's Te Puea Marae today - said there needed to be more options for people on low incomes, so they did not have to resort to credit cards, hire purchases and high-interest loans.
Robert Choy from Nga Tangata Microfinance said people on low incomes were not borrowing to pay for luxury items, they were borrowing to pay for the basics.
"It's the essential items that we might take for granted, around health, education, and even food. When you don't have sufficient income, your options are limited."
It was easy for loans to get out of control, he said.
"You can start off making a payment on a loan, but if you get behind, then the penalties, the very high interest that you're paying, basically create a spiral of indebtedness and once you get into that, then of course you're paying off more and more interest, and less and less of the so-called principal of the loan," Mr Choy said.
Auckland City Mission head Chris Farrelly said many people on low incomes had little or no money to spare.
That meant that when something went wrong, like the car breaks down, or they needed urgent medical treatment, it could be a big financial stress.
"So many of our population have no ability to access at all the small amounts, we're talking just hundreds of dollars."
Mr Farrelly said people needed alternatives to taking out high interest loans, so they did not end up in unmanageable debt.
"We can provide and should be able to provide systems of microfinance, low or no interest for small, short term loans."
Te Puea Marae chairman Hurimoana Dennis said many of the families who went to them for help last winter were struggling with debt.
He said much of what they were earning was going towards repaying that debt, leaving little left over. He said someone - whether it be the government or another agency - should step in and write off those debts, so families could get on with their lives.
"The kids might be going without because dad's got to pay the credit cards, or the fire purchases. I'm not saying that these things were not necessary at the time, but all I am saying that could be one strategy in helping good families get themselves back on track."
Nga Tangata Microfinance provided two different types of no interest loans for people on low incomes.
One could be used for essentials like home appliances, bedding and dental work. The other was a debt relief loan and was used to repay high interest loans.
Samantha - not her real name - was referred to Nga Tangata by her local budgeting service.
She is a solo mother to a teenage daughter. She said things had always been tight financially, but she'd always managed to get by, pay her bills on time and get her daughter what she needed.
But things changed when Samantha lost her job about a year ago.
"When my job finished, I fell into a bit of a hole actually, I was really tired, I had no energy and then on top of that, things financially started to change."
As well as dealing with day-to-day expenses, Samantha was also in about $3000 of debt.
"What happened was I did have three outstanding accounts and I was managing to pay the minimum, but the minimum only covered the interest, so it was never, ever going away. That made me scared. It made me a little scared about the future," she said.
It was at that point Samantha went to a budgeting service for help. She qualified for a debt relief loan from Nga Tangata to get what she owed under control, something she described as a "godsend".
Samantha said things were now beginning to look up.
"The thing is I can lift my head up and look around now. At that [earlier] stage I was just going day-to-day, I could not even think of tomorrow because tomorrow would be all these things to deal with. Now, I can look to tomorrow, or next week."