Loan sharks and cultural obligations to donate money have been identified as the main culprits in crippling levels of debt among some Pacific Island families.
Research carried out jointly by the Families Commission and the Ministry of Pacific Island Affairs examined the impact of the debt, with figures showing 885 low-income Pacific Island families owe more than $24 million, on average more than $27,000 per family.
Families Commissioner Dr James Prescott said The Pacific Families and Problem Debt Report, issued this weekend, identified the reasons and motivations behind debt, which would help agencies target approaches to financial literacy and numeracy training.
"For example, the report identifies that a whole-of-family focus is required to resolve issues, and to be effective, any intervention needs to recognise the critical role of Pacific women in managing the family finances."
He said many families couldn't afford to adhere to the cultural practice of giving money to churches and at family and community events. Pacific Islanders were also vulnerable to predatory fringe lenders and often did not understand loan terms and conditions.
Another significant issue was a reluctance to approach budgeting agencies although help was welcomed once it was offered.
"This is a very sensitive topic and many did not want others to know they were struggling. The result of this reluctance was often that by the time they made contact with an agency they were in a financial crisis, facing eviction, repossession of household items and cars, or a mortgagee sale," the report said.
The research also highlighted the influential role of the church in Pacific communities and its potential to encourage families to take advantage of support services and to live within their means.
NZN