Maori Financial Literacy - failure or success?

Financial literacy indigenous people

Kaikohe is a small town in the Northland region of New Zealand. A recent event Youth Rampage brought Kaikohe into the international limelight. This episode illustrated for me the lack of financial literacy of the Maori population.

One might say, hold on what has a so-called youth rampage to do with financial literacy for indigenous people? Good question.

For me the answer is obvious: Life is about decision making, making good decisions, particularly financial ones. They seem to drive our well-being to a large extend.

In response to the 'rampage' politicians called for more police, tougher penalties, more funding. However, in my opinion the cry for more police does not cut it.

Northland is often seen as the 'poor cousin' of New Zealand. 40% of the Far North population is of indigenous descent:
Far North Ethnic Make Up

Far North Income to 30k

Far North Income to 10k

Income levels in the Far North are generally significantly lower in comparison to the rest of New Zealand.
Despite the fact that more people in the Far North achieving greater incomes (blue chart), the very low-end of income have also increased (orange chart). Resulting in a curious divergence.

"Māori have endured the cultural and material loss characteristic of colonised white settler countries (Panoho 2012). Contemporary manifestations of colonisation abound with income levels for Māori a case in point."1

Financial Literacy
The OECD defines Financial Literacy as a combination of awareness, knowledge, skill, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual financial well-being.

From my point of view basic financial literacy includes:

  • Understanding loans and interest
  • Grasping the concept of budgeting
  • Controlling expenditure
  • Dealing with insurance

It by and large covers the learned ability to make basic informed decisions regarding the use and management of money.

Various iwi (NZ indigenous tribes), Government initiatives, local Councils and commercial banks all have expressed their intentions to lift the financial capability of the individuals they can influence.

There are certainly success stories. Hence little evidence of success is evident in the Far North region. A modern and developed country like New Zealand ought to exhibit more financial inclusion.

In a recent OECD survey New Zealand is ranked 6th ahead of heavyweights like Korea, The Netherlands and the UK.2
However, the ranking success for Far North Maori is not just about financial knowledge. It's more about having the confidence, motivation and attitude to make positive financial decisions.

Motivation and Attitude
A few years ago I was working with Maori on a large industrial site in the Bay of Plenty. One older Maori lady really impressed me. Despite having only minimal formal education, Marama embraced budgeting and cost management with a passion. She developed financial skills very quickly and used them to full effect.
With Marama's drive the team she was working in started to manage their own purchasing decisions and used these skills at home as well.

On another occasion a middle aged Maori male approached me about understanding budgeting. I showed him an example and he said that he could not read this as this looked like a sea of numbers to him. Nothing made sense until we sat down and went through it step-by step. He said to me I thought only accountants deal with this. I responded, now you know too and you are a truck driver.

Financial literacy gives greater choices in life. It places us all in the best position to make better decisions with better outcomes. For individuals and communities like Kaikohe.
A greater level of personal financial wellb-eing across our communities can assist us to greater prosperity  - for individuals and the business community.

About the Author
Markus lives in the Far North and works as a business coach.

Foot notes:
1 Spending Habits of Maori Women, Dr Pushpa Wood, Westpac Massey Fin-Ed Centre
2 OECD, International Survey of Adult Financial literacy competencies, 2016