Native people in the English-speaking countries of Australia, the United States, and Canada do not enjoy the same degree of financial inclusion and participation in the formal economy as the rest of the citizens of these countries. Challenges are rooted in history, and solutions must also take into account the issues of self-determination, autonomy, and sovereign rights.
The reservation system has left people with geographic isolation and extreme poverty; efforts at forced assimilation have stranded native people in urban areas where they experience social marginalisation, prejudice, loss of language and culture, and social isolation. Both groups experience a high rate of poverty, violence, and incarceration.
Financial literacy remains low, and traditional efforts at education and inclusion are dismissed as paternalistic, with remnants of colonialism, or as new and subversive efforts at forced assimilation.
In Australia, 43% of indigenous people are fully or severely financially excluded. The common use of welfare cards for social benefit programs keeps this population working and living on a cash basis. The understanding of social benefit programs as treaty guaranteed rights versus welfare is an issue that remains problematic.
Native owned and operated community development financial institutions are attempting to bring the benefits of financial inclusion to their people while navigating the thorny issues of sovereign rights, self-determination, and federal and state banking regulations. Financial literacy is being addressed at the reservation level, though this still excludes the urban native population. Tribal programs that work to develop capacity and opportunity are more likely to succeed, rather than efforts from outside the tribe.
Since the Native American Lending Study in 2001 (NALS) brought the issue of lack of capital investment on tribal lands into the mainstream, there has been an improvement in the number of community development institutions that are native-owned: from 14 in 2001 to 74 in 2016. There are now 18 native-owned banks, 3 of which are national. These community development financial institutions are providing both capital and consumer investment, and provide home buyer education, credit counselling, small business development, and various forms of financial education, including school-based programs. For the fifteen banks that are state-chartered, however, and are located near reservation lands, the culturally isolated urban native population remains excluded.
With the best wishes and intentions, mainstream society in Canada, The United States, and Australia still carries the burden of broken treaties, efforts at genocide, loss of land and language rights, and loss of self-determination. Many native people are still in mourning, multi-generational mourning, for their lost people, land, and culture. While the efforts to bring these people into the financial mainstream is guided by our best understanding of financial inclusion being a necessary first step out of poverty, they need and demand the right to make these determinations and efforts for themselves.
Support for the native-owned and operated community development financial institutions and other native owned microfinance initiatives may be the best first step, as well as access to capital development.
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