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Kimihia te mea ngaro - Maori access to capital

This page contains information on Kimihia te mea ngaro – Māori access to capital from the May 2021 Financial Stability Report.

The Māori economy is an integral part of the New Zealand economy, encompassing around $69 billion in assets as of 2018. It comprises businesses across a vast array of industries, including key commercial sectors such as farming, fishing and forestry. Māori also represent an increasing proportion of New Zealand’s population, and a growing part of the workforce.

In recognition of the role of Māori in the New Zealand economy, and as part of its Te Ao Māori strategy, the Reserve Bank recently released Te Ōhanga Māori – Māori Economy Report 2018 in partnership with Business and Economic Research Limited (BERL, 2021). This report identified several challenges faced by the Māori economy, with access to capital highlighted as one of the primary concerns.6

Māori customers and entities seeking to develop their economic or business positions tend to self-report lower rates of capital accessibility than non- Māori. This impacts their ability to realise their full economic potential and also inhibits the growth and productivity of New Zealand’s economy. These issues are interrelated with the financial system’s role of allocating capital in the economy. The Reserve Bank, through its mandate to promote a sound and efficient financial system, has an interest in better understanding the potential underinvestment of capital in Māori assets.

The Reserve Bank has therefore launched a work programme to better understand Māori access to capital in the New Zealand economy, with a focus on bank lending to Māori small and medium-sized enterprises. Bank lending to Māori households and individuals may also be considered as part of this work. Initial research designed to capture a snapshot of the issues landscape has already been completed. It highlights a dearth of quantitative data, while qualitative interviews suggest the Reserve Bank should dive deeper into this issue to understand its implications more clearly.

The next step in this research will be to further develop the quantitative assessment of Māori access to capital. It will also assess whether any issues arising in capital access either constitute a potential market failure or highlight gaps in the New Zealand lending market. This assessment will guide policy and regulatory interventions, if and where necessary.

This work aims to use the Te Ao Māori strategy to incorporate a long-term, intergenerational view of wellbeing into the Reserve Bank’s core functions. It will also inform the Reserve Bank’s financial inclusion work and the allocative efficiency elements of its monetary policy and financial stability mandates. The Reserve Bank is treating this work as a high priority within its strategic work programme.

The intention is for this work to be a cross-agency effort, involving both the public and private sectors.


6 Research recently undertaken by BDO (2020) and the Productivity Commission (2021) also reported similar findings.