Kiwibank disrupts traditional banking rules to support Māori businesses to grow


Kiwibank has relaxed some of the biggest hurdles facing start-ups and small businesses who are looking to grow, starting with the Māori economy which is valued at $69 billion but lags behind the broader New Zealand economy as a whole.

Head of Māori Advisory at Kiwibank, Teaho Pihama, says the way banks lend to businesses has always had a disproportionately negative impact on Māori firms, particularly start-ups and SMEs looking to their banks for lending.

“Banks have always applied a one-size-fits-all risk approach which typically requires the business owner or owners to provide their residential home as security over the business loan.

“This has an unintended negative impact on Māori because they are statistically less likely to own their own home, or the land they own is communally held and harder for banks to lend against.

It’s all too easy for banks to look at these challenges and decide it’s too risky to lend, which makes it harder for Māori businesses to achieve their true potential and contribute as much as they can to Aotearoa’s broader economic growth.
Teaho Pihama, Kiwibank Head of Māori Advisory

Mr Pihama says Kiwibank has responded to these challenges by adopting a te ao Māori approach to the way it engages with its customers, and by disrupting some of its own rules.

“We’ve changed the way we assess a company’s historical performance; we look at non-financial factors, such as experience, expertise and customer loyalty, as well as financial factors like revenue and cashflow. Importantly, for smaller sums of lending, we’ve also removed the requirement that the lending needs to be secured against a business owner’s personal property.”

One customer who has benefitted from Kiwibank’s new lending criteria is Whangārei solar panel company Solartive. Ella Te Huia-Phillips, director of Solartive launched the company after seeing the need for solar power in rural Te Tai Tokerau/Northland communities. Ella approached other banks to source the funding for starting Solartive, however Kiwibank were a far better option to go with offering more flexible terms so, she turned to Kiwibank.

“Kiwibank were amazing to deal with, I had one person who helped me through the whole process which made it simple and easy. And it is awesome to know I was dealing with a New Zealand-owned bank. The funding has helped us stay in business, helps with cashflow, inventory and with the overall growth of our business.”

Kiwibank General Manager of Business Banking, Joanna Greaves, says while the initiative was born out of the need to address some of the challenges unique to Māori, the changes will benefit all start-up and young business in need of lending to grow.

“One of the great things about this mahi is that it enables Māori and non-Māori businesses to grow and thrive, delivering on our purpose of making Kiwi better off.

Small businesses contribute a huge amount to the New Zealand economy, so the more we can do to support them, the better off we all are as a result.
Joanna Greaves, Kiwibank General Manager of Business Banking