NOTICE: What is debt? Essentially, debt is money owed to a lender. Debt is made up of household or individual debt (such as mortgages, consumer loans such as credit cards and student loans), corporate debt, and national or government debt.

In New Zealand, the Reserve Bank lends money to commercial or commercial banks (such as Kiwibank, BNZ, ANZ, etc.), credit unions or building societies, which are considered to be “premier lenders.” rank”.

There are also second tier non-bank lenders (finance companies that are not banks) and third tier lenders who offer non-mortgage personal loans. The Reserve Bank is also responsible for regulating both banks and non-bank lenders.

Debt as we understand it today did not exist before colonization, although the utu system, which was ruled by tikanga, set standards and expectations of reciprocity.

There were two main types of exchanges: pragmatic economic exchanges (like food) and ceremonial or political exchanges aimed at establishing and maintaining relationships.

It is important to note that indebtedness was collective rather than individual and aimed at accessing resources, as well as exchanging and distributing goods and services. Rangatira (as representatives of hapū) was responsible for these exchanges, which consisted of a system of donation and counter-donation or koha.

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Debt was introduced in New Zealand with the banking system. The first bank in New Zealand, the Union Bank of Australia, headquartered in London, was established by the New Zealand Company in Wellington in 1840.

The notice in the newspaper read: “The Directors … recommend to the settlers the Union Bank of Australia as a trustworthy institution capable of effectively supporting the financial needs of the Colony.”

Iwi Māori also had a history of establishing banks, in response to the establishment of banks by settlers. The best known example is Te Peeke o Aotearoa or the Bank of Aotearoa, established by King Tāwhiao in 1886, which had branches in Maungatautari and Maungakawa.

Internationally, debt has been used to finance and promote the goals of colonization – both historically and simultaneously. During the height of the colonial era, the creation of state banking institutions, such as the Bank of England in 1694 and the General Bank in 1716, both financed and benefited from colonial expansion via stock companies.

Debt continues to be used as a tool for US imperialism and its expansion through the international monetary aid system, with US and Western European capital posing continuing threats to sovereignty in the “developing world.” And postcolonial nations.

Debt was also instrumental in the colonization of New Zealand. The New Zealand Company (the limited company used as a vehicle for colonization in New Zealand) borrowed huge sums of money from Britain to finance the colonization of New Zealand.

The business subsequently became insolvent and was purchased by the Crown. One of the first acts of the newly formed New Zealand Parliament (opened May 24, 1854) was to settle New Zealand society’s debt with a loan guaranteed by the British government.

The debt incurred by colonization was therefore repaid through the appropriation and sale of Maori land. The Waikato invasion, for example, was financed by debt, with a raupatu of large tracts of land later used to recoup those costs.

In New Zealand and elsewhere, the legacy of financial colonialism persists – Maori are more likely to have higher levels of personal or household debt (due to lower income and lower net worth in the together).

According to data from the RBNZ (Housing Balance – C22 December 2020), New Zealand households have a total of $ 249.82 billion in debt, of which 87.6% is mortgages, 6.4% student loans and 6% consumer loans.

For Maori families, the total amount of debt was $ 18.9 billion, of which 79.6% was mortgages (home loans and other home loans), 8.7% student loans, and 11.7% personal loans, credit card debt, and other types of debt.

Comparatively, the Pākehā have higher levels of mortgage debt and lower levels of education and other debts.

Racial discrimination within the lending system is an ongoing problem, a 2015 study by Carla Houkamau and Chris Sibley finding that “Maori appearance” decreases the likelihood that a mortgage application will be approved by a bank or agency. Financial institution.

Predatory lenders, such as loan sharks and mobile traders, provide cheap credit at high interest rates and target low-income Maori and Pasifika neighborhoods (although this problem has been alleviated with the introduction of new regulations in June 2020 which amended credit agreements. and Consumer Finance Act).

Debt is a colonial construct – the implications of which continue to be felt in the colonies.

Jade Kake is an architectural designer, writer and housing advocate based in Whangārei. Of Maori and Dutch origin, his tribal affiliations are Ngāpuhi, Te Whakatōhea and Te Arawa.