The Government is considering a proposal to make corporate social responsibility reporting mandatory for "mainstream financial institutions" as a way of encouraging the development of more affordable finance options for the financially disadvantaged.The proposal is one of a number included in a Government discussion paper, released on Tuesday, which canvasses strategies aimed at reducing dependence on high-cost, short-term loans by enhancing access to alternative lower-cost financial products or to other assistance.The Government's view is that banks and other large financial institutions have a very low level of involvement in the provision of affordable finance.Other proposals in the paper, Strategies for Reducing Reliance on High-Cost, Short-Term Small Amount Lending, include extending the Government's Centrepay scheme to cover a wider range of aims. This might involve linking with community development financial institutions.The Government is also looking at extending deductible gift-recipient status to community development financial institutions.The paper said: "The Government recognises the value of the small amount lending sector, as it fills an important gap in the marketplace. However, the cost of these loans can be very high due to their short-term nature and high risk."This type of borrowing by the financially disadvantaged can perpetuate debt problems, as they need to spend a relatively high percentage of their income to service the debt."A significant number of borrowers use short-term loans to pay for basic expenses, including food, utility bills, rent and car repairs. Research by the Consumer Action Law Centre puts the number at 71 per cent, while the Consumer Law Centre Victoria puts the number borrowing for "non-discretionary spending" at 78 per cent.The number of short-term loans written each year is estimated to be 674,000, worth A$500 million.A Griffith University study, in 2008, found that the fee for a $300 loan, repayable in a week, ranged from $41 to $195. Fees for a $300 loan, repayable in 26 weeks, ranged from $157 to $376. For a $1000 loan, repayable over a year, the fee ranged from $622 to $2074.Currently, the Government's Financial Management Program offers emergency relief, in the form of food, clothing and vouchers, and financial counselling, and a microfinance scheme that includes no-interest loans with a matched savings program run by the Brotherhood of St Laurence and ANZ.The Government is also running a Community Development Financial Institutions' pilot project (a low-cost lending scheme) and a Home Energy Saver Scheme.The Department of Human Services has a bill payment services, called Centrepay, to deal with lumpy expenses. This allows for deductions from DHS payments that are forwarded to the biller.The paper says that, given the high level of usage of short-term loans to pay utility bills, the operation of utility hardship schemes should be subject to more rigorous standards, with better information and access."These hardship programs are not well utilised or recognised," it said.One option is that providers of high-cost, short-term loans be required to advise individuals about the existence of hardship programs when they seek loans to pay utilities bills.