The Backing Black Business report commissioned by Generation One, part of Minderoo Foundation, exposes the barriers Indigenous businesses and Aboriginal and Torres Strait Islander entrepreneurs face in accessing financial products and services.
More than 100 Aboriginal and Torres Strait Islander entrepreneurs were consulted as part of the report, undertaken by PricewaterhouseCoopers Indigenous Consulting (PIC), which identified financial exclusion remains the reality for many, due to factors including little intergenerational wealth to draw upon when establishing or expanding a business, a lack of credit history, and inflexible lending criteria by financial institutions.
Backing Black Business lists seven concepts that would serve Aboriginal and Torres Strait Islander entrepreneurs to grow and scale their businesses and, in turn, allow them to hire more Indigenous Australians. The concepts identified include:
Nearly 40 per cent of Indigenous business owners consulted as part of the report felt the process for applying for financial products and support was too complex, and almost half had been unsuccessful in at least one of their applications.
Others pointed to a lack of understanding of Aboriginal and Torres Strait Islander cultures and ways of doing business amongst providers of financial products and support.
“Many Aboriginal and Torres Strait Islander entrepreneurs also cited the overwhelming slow and onerous processes in accessing financial support,” Ms Cable said. “The complexity of the products and services available to assist and the policy settings that define Indigenous businesses and seek to prevent ‘black cladding’ are also restricting the growth of those businesses.
Research published in the report reveals that while demand for goods and services from Indigenous businesses continues to grow, the ability of those businesses to meet this demand is curtailed by the ongoing impacts of financial exclusion.
“We hope the solutions outlined in this report catalyse action, help Aboriginal and Torres Strait Islander entrepreneurs get access to the capital they need, and ultimately contribute to closing the employment and self-employment gaps that exist for Aboriginal and Torres Strait Islander people,” Ms Cable said.
“At Generation One we are committed to backing Indigenous businesses and will continue to do so on our mission to close the Indigenous employment gap within our generation. Because we know Indigenous businesses are up to 100 times more likely to employ Indigenous Australians, backing Aboriginal and Torres Strait Islander entrepreneurs will not only promote self-determination, but self-employment at scale.”
PIC chief executive Jodie Sizer said the report’s engagement process “confirmed what we suspected”.
“Financial exclusion is curtailing both the establishment and expansion of Indigenous businesses across Australia,” Ms Sizer said. “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 to thrive as business owners, investors and employees. In a complex and busy environment, a commitment to Aboriginal-led approaches will be key to realising real and lasting change.”
The financial exclusion of thousands of Indigenous businesses is a key theme addressed by Minderoo Foundation Chairman Dr Andrew Forrest AO’s in his third Boyer Lecture – titled “The Economics of Inequality”. Dr Forrest’s third Boyer Lecture will air on ABC Radio National this Sunday (7 February) at 12noon.
Established by Andrew and Nicola Forrest in 2001, we are a modern philanthropic organisation seeking to break down barriers, innovate and drive positive, lasting change. Minderoo Foundation is proudly Australian, with eight key initiatives spanning from ocean research and ending slavery, to collaboration in cancer and community projects.