..



.

Business News

Want to boost Aboriginal financial capability? Spend time in communities

  • Written by Jonathon Louth, Research Fellow, Australian Centre for Community Services Research, Flinders University

One of the key themes from the Banking Royal Commission’s trip to Darwin[1] was the rampant predatory practices of payday lenders and funeral insurers[2] who have targeted regional and remote Aboriginal communities. Our research [3] found many other examples of practices that placed Indigenous Australians at financial risk.

To take just one example: we interviewed a participant with an intermittent work history who borrowed A$18,000 for a car. They were then encouraged to top the loan up by an additional A$4,000. The interest rate on the loan was 35%. After falling into arrears the client entered into an arrangement to pay back the loan.

The final amount paid back? A$52,000. The car had long since stopped working.

While this predatory behaviour should be addressed, our study shows we need to shift our understanding of economic knowledge in remote communities. There isn’t a deficit of knowledge, rather there are different practices that don’t always align with mainstream expectations.

Indigenous understandings of their local economies are often built on notions of reciprocity. Addressing financial capability requires patience and time spent in the community, rather than a unidirectional, top down “mainstream-is-best” approach.

Financial institutions need to develop their own cultural literacy to better serve and respond to remote Aboriginal communities.

Read more: Royal commission scandals are the result of poor financial regulation, not literacy[4]

Broadly conceived, the federally funded Financial Wellbeing and Capability (FWC) program[5] specifically aims to improve financial literacy for vulnerable individuals and groups nationwide.

It’s an argument that says the route out of poverty is to better understand financial decision making. Yet research has shown to be receptive to mainstream financial literacy programs, patience is key[6].

Our research[7] was based on a deep qualitative engagement and evaluation of CatholicCare NT[8]’s financial well-being program in the Northern Territory.

The research revealed the extent to which certain financial products are simply inappropriate or poorly understood. This is compounded because financial concepts in and of themselves often do not relate or have traction in the everyday lives of many in remote communities.

Want to boost Aboriginal financial capability? Spend time in communities Map of communities visited with CatholicCare NT FWC teams. Distance and remoteness add considerable challenges to service providers. Google Maps

Interest on a bank loan is an excellent example. If you have limited exposure to mainstream economic practices then this can be an abstract concept.

When we asked Indigenous participants to explain what interest on a loan is, only 11% provided an explanation. With some additional analogies, on the second ask, this number rose to 39%. While the sample size for non-Indigenous participants was small, the figure for this group when asked the same question was 100%.

Read more: There are serious problems with the concept of 'financial literacy'[9]

The CatholicCare NT model is unique in that it has outreach teams who take time to develop culturally and community appropriate practices.

This is something that takes time and patience.

To address financial literacy issues it can’t be a top-down approach. Financial institutions need to develop their own cultural literacy to better serve and respond to remote Aboriginal communities.

Understanding and appreciating how social and cultural values underpin financial activities in a remote setting is key[10].

It cannot and should not be about telling people or communities how they must (or must not) share their economic resources. Developing financial capabilities has to be about addressing Indigenous financial exclusion, by aligning with localised concepts of well-being that reflect cultural expectations.

This can be expressed with reference to noted economist Amartya Sen’s capabilities approach, which is about expanding “people’s freedom to choose the kind of lives they want to lead, do what they want to do and be the person they want to be[11].”

Read more: Consumers need critical thinking to fend off banks' bad behaviour[12]

During our research we had a long conversation with an elder in a remote community. He made it quite clear “You can’t just come in like a fly and take-off”.

In all his years, he said this was the first occasion somebody “from town” had spoken to him about how “money stuff” should be dealt with and what he thought the solutions might be.

This was an exercise in listening and learning how local and Indigenous remote economies work – and to better understand the gap between these economies and the mainstream Western economy that has been imposed.

It’s the spaces in between these economies where strength-based outcomes can be achieved.

In one community, a clan group has set up a joint bank account. The account is for clan business or if there’s some sudden financial need. It represents a collective response and it’s a strong example of how gaps between these blurred economic worlds can be bridged.

If we wish to deal with a breadth of social issues – health, housing, family and relationship stress – dealing with Indigenous financial exclusion is a foundational issue as it relates directly to a person and to their community’s financial and material security.

While regulations around payday lending need tightening, it’s imperative programs like those run by CatholicCare NT continue to be funded.

In an era of increased financialisation[13], it’s these programs that are helping to shine a light while working alongside communities to overcome financial exclusion.

Authors: Jonathon Louth, Research Fellow, Australian Centre for Community Services Research, Flinders University

Read more http://theconversation.com/want-to-boost-aboriginal-financial-capability-spend-time-in-communities-99210

Business Daily Media Business Development

Bahrain Property Show 2018: How does it reflect the real estate market development in Bahrain

It is no secret that the Arabian Peninsula and the Gulf Cooperation Council (GCC) countries are currently going through a lot of pivotal changes. Such changes do not include economic or po...

News Company - avatar News Company

Di Jones real estate recognises high achievers

Di Jones celebrated its outstanding performers on Saturday (24 February 2018) evening at the Di Jones Real Estate Annual Awards.                               The black-tie Gala Dinner s...

Helen Hull - avatar Helen Hull

Five Reasons Melbourne Rules

If you are traveling in Australia and have left Melbourne off your destination list, then you are going to want to reconsider. Many people consider Melbourne to the best city in the world...

News Feature Team - avatar News Feature Team

Making Friends During Your Campsite Stay

Part of the excitement of vacation is meeting people who you would never otherwise encounter. Staying at a campsite isn’t just about taking in nature. It’s also about sharing the beauty of n...

News Feature Team - avatar News Feature Team

Have More Fun On Your Business Trips

Whether you are a traveling salesman or someone who finds themselves on the road more than in their office you probably are grateful for any tips you can get especially if they involve havin...

News Feature Team - avatar News Feature Team

Traditions of Rural Bali at Villa Sabana

A Privileged Insight into the Traditions of Rural Bali at Villa Sabana  Situated in the traditional village of Pererenan near Canggu, Villa Sabana is peacefully secluded in a semi-rural...

Linda Lim - avatar Linda Lim

Business Daily Media Business Reports

Di Jones real estate recognises high achievers

Di Jones celebrated its outstanding performers on Saturday (24 February 2018) evening at the Di Jones Real Estate Annual Awards.                               The bla...

Helen Hull - avatar Helen Hull

Eclipse Travel Expands Operations to New Zealand

Eclipse Travel, specialists in key adventure destinations such as Antarctica, the Arctic, Africa and Latin America, have announced today their expansion of operations to ...

Yvonne Kong - avatar Yvonne Kong

How medical professionals can benefit from an overall wealth management solution

As a health care professional, you have made it your life's work to focus on the care and health of the general public. While this kind of work can be extremely rewarding...

News Feature Team - avatar News Feature Team

Why Pinterest Should Be Part of Your Marketing Strategy

Pinterest is a growing social media platform that can deliver significant traffic to your website and new followers to your brand. With it’s steady growth and outrageous ...

Greg Nunan - avatar Greg Nunan

The top reasons why gyms fail

Steve Grant is a Business Coach and Founder of GymHub.com.au   Every month thousands of new trainers walk out of their 6-month course with the qualifications needed ...

Steve Grant - avatar Steve Grant

WHITE LABEL NOBA’s Winter 2016 season: Earth + Country

Taking cues from the warm winter colours of tobacco and caramel, and combining them with the strength of navy and the embracing lightness of whites and creams; and then...

Kath Rose - avatar Kath Rose

Former Etihad boss brings substantial event insight to PMY Group Board

Paul Sergeant PMY Group, the architects of the digital insurgency occurring at major venues across Australia and New Zealand, are delighted to welcome 35 year even...

Annie Konieczny - avatar Annie Konieczny

More training for coffee making than property sales: REINSW

Sydney 9 May 2016. An overhaul of education and training standards for the real estate profession must take place to help prevent illegal activities, according to the Rea...

Helen Hull - avatar Helen Hull