Access to Micro-finance in New Zealand

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Providers of Micro-finance in New Zealand
Government Agency Initiatives
Identifying Gaps

As has already been noted, there is an overall lack of literature on women and micro-finance in the context of developed countries. Even less has been written about the topic in New Zealand, and what has been written is often anecdotal, lacking in a robust methodology or too dated to be of much value as an underpinning for the current project. As a way of balancing this absence, the researchers had a secondary objective: to identify what is occurring in New Zealand in terms of the delivery of micro-finance to women. The non-academic literature provided much of this material, which was also supplemented by information from the key informants. The objective was not to provide a comprehensive listing of all the agencies and/or the programmes that they offered (as this is adequately described elsewhere), but to list the key organisations involved in the provision of micro-finance to women in New Zealand at this time.

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PROVIDERS OF MICRO-FINANCE IN NEW ZEALAND

There are a number of organisations that provide micro-finance to women in New Zealand. These are chiefly non-governmental organisations and/or membership based (although many of the programmes they provide are made possible through funding from government agencies), and while some focus on women quite specifically, others treat women as just one of their client groups. For example, in the publication Sources of capital available to SMEs in New Zealand (Te Puni Kokiri, 1994; Ministry of Commerce, 2000) there are a number of sources identified specifically for women (often classed as "ethical investment" organisations). This publication also offers practical guidelines for those seeking to obtain finance. Other individuals or government departments have also published guides or directories that contain suggestions for women on where to obtain finance (for example Bywater & Hely, 1990 & MWA, 1994). Some of the key organisations include the following: The Federation of Business and Professional Women is encouraging its network of women's clubs to help extend its loan fund around the country. The fund makes interest-free loans of between $50 and $1500 to women who might not be able to borrow from banks. It also offers budgeting advice and mentoring support ("Fund aims", 1999). The Women's Loan Fund was started in Wellington in 1992 and the intention of the fund is to "provide loan money at no interest for women who would otherwise, not have access to affordable credit" (Women's Loan Fund Network, 1998). Since its inception the model has been taken up in some 14 other New Zealand locations (and in New South Wales). Much has been written about the various branches of the fund, for example the Invercargill Women's Loan Fund, which was set up by the Wise Women Network to provide alternative funding for women: "We are not in competition with normal business funding. We will try to help where others might not" (Veltkamp, 1999, p.2). The fund also provides mentoring in conjunction with loans. Māori Women's Development Inc. (which now also lends to men) has been operating since the mid 1980s, with a particular focus on enabling Māoriwomen to attain "economic sovereignty". Their focus is on lending amounts below $20k and on facilitation services. In addition to those listed, a number of loan funds also lend to women as one of their client groups. These include the Nelson Enterprise Loan Trust that provides small business finance for people unable to get bank loans ($5,000 limit, average loan is $3,500), the Poutama Trust and the Pacific Business Trust.

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GOVERNMENT AGENCY INITIATIVES

After the 1984 election there was a radical shift in focus for governmental initiatives. Instead of attempting to identify points at which government could assist to address specific groups and their needs, the focus shifted to identify points of market failure. For some years the consequence of this philosophy was a lack of policies and programmes that were seen as having the potential to overlap with those that could be provided by the market. The provision of finance was one of those areas in which the market was seen to be the natural "provider" and despite the severe downturn for the financial service industry that followed the 1987 stock market crash, there continued to be a lack of lack of focus on the area by government agencies. This stance began to change in the mid 1990s, and over the term of the current government there has been a noticeable acceleration in the implementation of programmes that address various supply issues regarded as constraining economic growth. For example, the BIZ programme provides a number of services (mainly training) to individuals operating SMEs, and women are a specific target group of this programme. A similar scheme is the Māori Business Facilitation Service (MBFS), which offers a support service (including mentoring) to Māori business owners. Government is also progressing work on ensuring New Zealand businesses have access to appropriate forms of finance. For example, Industry New Zealand has several programmes such as the Investment Ready Scheme, BIZ Training, and enterprise awards aimed at improving business access to appropriate forms of finance. The Ministry of Economic Development is scoping existing information on SME access to finance to identify issues that may be impacting on business ability to raise appropriate finance. This will inform the work programme in this area, and if gender issues are identified as a problem/issue then more work may be forthcoming. While it is heartening to see that there is a level of commitment to exploring the issues in this area, it would still be fair to say that there is little currently on the work programme of the major government agencies. The key informants had a number of opinions as to why this situation exists. The predominant theme was the lack of "urgency" in relation to women in New Zealand. While at present there is insufficient evidence to quantify the level of difficulty women experience when accessing finance, there is no doubt that certain issues exist for women. These issues are not experienced by all women, nor is there a clear framework for identifying different groups of women who are experiencing some problems rather than others. This lack of homogeneity is reflected in the different opinions offered by the key respondents, who offered a number of different perspectives on the key issues and how best to address them.

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IDENTIFYING GAPS

One of the most useful frameworks for analysing the provision of programmes to particular target groups was developed by the ILO. Thisframework presents four elements (inferred needs of the client group, the institutions/agencies that exist; government policies and programmes (offered by government agencies and/or other institutions) in a way which makes it possible to assess their relationship. Figure 4 applies this framework to New Zealand. This representation demonstrates the fact that although New Zealand does have a policy framework for the delivery of micro-finance (and/or micro-credit) to women (at least on the international level), there is very little provision, either from the perspective of programmes or from an institutional perspective. Another gap is in terms of the knowledge base about the "inferred needs" of the women involved.The implications of this situation will be discussed in more detail in the following section.

Figure 4: The provision of micro-credit to women in New Zealand

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