Groundbreaking report reveals level of Indigenous financial exclusion

Aboriginal and Torres Strait Islanders fall into two groups – one suffering the most financial stress in Australia, another starting to build financial resilience – but both are struggling with access to financial services, new research has shown.

First Nations Foundation (FNF) and the Centre for Social Impact (CSI) today released a report examining the financial resilience of Aboriginal and Torres Strait Islander Australians , which also provides recommendations for financial institutions that are delivering products and services for Indigenous people.

The report builds on the work that CSI and NAB have been doing together since 2015 that looks at the financial resilience of Australians. In the first of its kind research, this new report seeks to understand how Indigenous Australians talk about money, and learn more about their financial goals and aspirations.

A key finding is that many Aboriginal and Torres Strait Islander people focus on the wellbeing of family and community, rather than individual wealth and accumulation of money or assets.

Amanda Young, CEO of the FNF said that Indigenous money aspirations are traditionally modest. “For First Nations people, the idea of financial wellbeing is viewed through the lens of family and community. It’s not just confined to dollars; it’s how well an Indigenous family and the community around it are faring.

The report highlights a revealing, but not unexpected, fact: that one in two experience financial stress. That is why 75% give money to family and friends. This research has the potential to reframe the conversation in Australia on what we truly value.”

Professor Kristy Muir, agreed: “The research shows that much more work needs to be done to include Indigenous Australians in the economy. We need to come together to improve the availability, accessibility and appropriateness of financial products and services.

"We need to support people who are financially excluded to avoid predatory or high cost products that lock them into perpetual poverty. This research provides guidance for where financial services organisations, governments, and not-for-profits can focus to help create meaningful social change for our first nations people.”

NAB General Manager Social Impact, Sasha Courville said: “This research provides us with useful insights on how we can better understand and support Aboriginal and Torres Strait Islander Australians to improve their financial resilience. NAB has been supporting Indigenous Australians’ financial inclusion and resilience through our Reconciliation Action Plans, including supporting more than $15 million in fair and affordable microfinance loans to more than 16,000 Indigenous Australians since 2015. This research will continue to inform our understanding and the actions we take to better help our customers.”

Amanda Young said, “This research draws out the wisdom of First Nations people about what is truly important about wellbeing, which isn’t the same as that found in other parts of the Australian demographic landscape. In order to truly tackle the challenges ahead, it requires both the support of the entire financial services industry to help develop a roadmap to an inclusive financial future, and the involvement of Indigenous Australians in the development of that roadmap.”

Key findings:

• A total of 620 Aboriginal and Torres Strait Islander people participated in the survey, either online or in face-to-face interviews
• The research found that ‘money trouble’ was prevalent amongst respondents and that money goals overall were modest
• 75% of people had some difficulty getting help from financial services in the past 12 months
• “Financial social capital” encompasses people’s relationships and social resources, and 84.9% of respondents fell in its middle band of low to moderate
• Three quarters of Indigenous people give money to family and friends to help
• 53.1% of respondents scored as having low to moderate levels of economic resources, and one third scored very low
• 62% of respondents had moderate or high access and use of financial products and services
• 70.9% had low or moderate financial knowledge and behaviour