M¯aori bank idea worth investing thought in
Recent calls, by the Ma¯ ori Council, for a Ma¯ ori bank will probably attract some negative comment from traditional financial circles, but such an idea needs to be given serious consideration and even government assistance to get it established if required.
The suggestion is a response to the number of Ma¯ ori being shunned by the four big Australian-owned banks for home loans and the Ma¯ ori Council has asked all iwi to work together to establish their own bank. With Ma¯ ori home ownership at 43 per cent compared to 63 per cent for the general population and with Ma¯ ori five times more likely to be homeless than others, the issue is a serious one.
Ma¯ ori Council Tamaki District chairman Matthew Tukaki said getting a loan was one of the biggest hurdles for Ma¯ ori wanting to own their own homes, Getting credit lending through the traditional banking system or the big four banks was very restrictive.
Tukaki said such a bank would focus on lending for building on Ma¯ ori-owned land and small business loans to close the gaps of financial inequity many Ma¯ ori face. More importantly, he said, a Ma¯ ori bank would be for everybody but the primary focus would be on the development of Ma¯ ori.
The idea is not new as a Ma¯ ori bank was established near modern Cambridge in the early 1880s for pretty much the same reasons. The determinations of the Native Land Court turned a few Ma¯ ori into millionaire landowners overnight and dispossessed hundreds of others. Some court officials could speak a little Ma¯ ori but traditional Ma¯ ori land tenure was complex and very different to British ownership. Most lawyers and judges of the time, even those born in New Zealand, did not have a thorough understanding of the system. Those Ma¯ ori owners who sold land suddenly found they had huge amounts of money, even after debts were settled. Some followed tradition and shared the money among extended families and it soon disappeared. Others followed advice and deposited it in banks where it would be ‘‘safe until needed’’. These deposits were generally for a fixed term or on call at no interest.
Their new bank was named Te Maungatautari Whare Uta or Maungatautari Money House and was built in the traditional style with raupo walls and three internal rooms. One room was known as the strong room where thousands of pounds in cash was kept in candle boxes.
To European bankers, accountants and community leaders the risks and inadequacies of the enterprise were obvious. Without an income from a carefully managed investment portfolio the bank was at real risk of failure if and when land sales eventually dried up or a number of large fixed-term deposits matured at the same time and the customers wanted to withdraw rather than reinvest.
Rather than the authorities assisting with advice on the complexities of banking however, the bank became the source of jokes and disparaging comment with accusations that the directors, who were paid an honorarium, were also helping themselves to the almost unlimited money in the bank.
The social elite even made fun of the uniforms the unarmed guards were wearing and the thin raupo walls of the bank until one of the directors made the point that bank robbing was a uniquely Pa¯ keha¯ sport. No Ma¯ ori would dare steal from the bank as it would be serious breach of tapu to do so; a much more effective protection than guards and guns.
The failure of the bank, however, was inevitable but, when it came, it was not due to a shortage of new deposits or a run on funds. It came from the tragic mix of ancient tribal protocols and the rules of capitalism. Ma¯ ori knew one of these systems very well but the other was a mystery. Pa¯ keha¯ knew the rules of capitalism but could see no reason to explain them to Ma¯ ori. They had little knowledge of Ma¯ ori tribal society and no incentive to learn.
Some things have changed over the past 140-odd years but others remain pretty much as they were. While the Ma¯ ori economy, including iwi-owned businesses, now represents more than $40 billion, too many Ma¯ ori are still denied equal access to loans and mortgages.
A New Zealand-owned bank for New Zealanders, be they Ma¯ ori or others, has been the dream and indeed the unfulfilled promise of too many politicians for too long. This time the Ma¯ ori bankers may be pleasantly surprised how many ordinary non-Ma¯ ori on average incomes with average dreams of home ownership may be waiting for their doors to open. This idea warrants wide community support.