Generation One, an initiative of the Minderoo Foundation, has commissioned a report to address the barriers Aboriginal and Torres Strait Islander entrepreneurs and businesses are facing in the face of more effective business success.
Generation One engaged PricewaterhouseCoopers Indigenous Consulting (PIC) services to conduct the research and spoke to over 100 Aboriginal and Torres Strait Islander entrepreneurs.
The report, Backing Black Business, identified financial exclusion as a key barrier, due to a combination of factors such as a lack of intergenerational wealth, a lack of credit history, and strict lending criteria by financial institutions.
The report also detailed a strong overrepresentation in areas of administration and support services, as well as education.
“Financial exclusion is curtailing both the establishment and expansion of Indigenous businesses across Australia,” said PIC CEO and Gunditjmara/Djab Wurrung woman Jodie Sizer.
“Our commitment to self-determination requires more investment in this space from public, private and philanthropic sources, which we believe will lead to more opportunities for Aboriginal and Torres Strait Islander people tp thrive as business owners, investors and employees.”
In layman’s terms, financial inclusion means having access to the financial products and services one might need — things such as credit ratings or being able to open a bank account. Financial exclusion is not having this ease of access or sometimes, access at all.
Generation One CEO Shelley Cable and Wilman Noongar woman said the financial exclusion that Aboriginal and Torres Strait Islander people face is exacerbated when starting a business, with many struggling to get the capital they need.
“Our mob are severely financially excluded as individuals … What this report did was it extended that to what it looks like at an entrepreneurial and business level,” Cable told NIT.
“[The report] was about understanding the space and what was needed, to know how to support the sector to the next level.”
The report identifies the lack of cultural understanding and different ways of doing business as another barrier.
Cable said Indigenous businesses often have a stronger community focus as opposed to non-Indigenous businesses.
“One of the things I would point to is what we consider important as Indigenous entrepreneurs and what we consider success,” she said.
“Where a financial institution might be more interested in profits, often with mob it’s community impact.”
With Indigenous business seeing a huge influx of support in recent years, partly thanks to the federal Indigenous Procurement Policy, the sector is struggling to keep up with the demand due to financial exclusion
The report suggested a several recommendations; each one can be seen as making a smarter investment into Blak business — whether it’s investing in people, processes or accessibility. These included:
- A $20,000-$200,000 low or no-interest loan product with non-traditional lending criteria
- An Indigenous-owned and led patient capital investment fund
- A First Nations Bank of Australia
- Creating Australia’s biggest gathering or summit of First Nations business leaders
- An Indigenous Investment Market
- A business advisory and support service for maturing and mature Indigenous businesses
- Investing in cultural awareness education for mainstream financial institutions and providers.
Key to this would be aligning policies, strategies, organisations and initiatives all to support the Indigenous business sector.
“They’re a very diverse set of recommendations,” Cable said.
The Generation One CEO said it’s about making sure financial institutions and entities can cater to mob at the entrepreneurial and business level.
For now, Generation One and PIC are seeking feedback on the seven recommendations.
“None of these are things that any one organisation can implement by themselves, nor should they,” Cable said.
“These solutions absolutely deserve to be explored.”
While Cable herself is particularly excited about the idea of a self-determined First Nations Bank of Australia, she acknowledges other solutions may be more realistic in the short term.
“I think [a First Nations Bank of Australia] could be an absolute game changer,” she said.
“But for me, it’s about what can the impact be now.”
To read the Backing Black Business report, head here.
By Hannah Cross and Rachel Stringfellow