Building a bridge to financial resilience
This week, Reconciliation Australia marks twenty years of shaping the journey of Australia towards a nation that is more just, equitable and reconciled.
The theme for 2020 is ‘In This Together’, focusing on the role all of us can play when it comes to reconciliation, and how in doing so, we can build relationships and communities that value the history and culture of Aboriginal and Torres Strait Islander peoples.
In this interview with social entrepreneur, Dr Vinita Godinho, she highlights that improving financial inclusion through a focus on financial resilience for Indigenous people, and building a bridge between Indigenous and non-Indigenous understandings of money, will be critical in helping all of us be ‘In This Together’.
Dr. Vinita Godinho is the CEO and managing director of Financial Resilience Australia, and has significant experience across the financial services industry, academia, and the non-profit sector through nearly a decade of work with Good Shepherd Microfinance.
Godinho also focused a PhD thesis on Money, Financial Capability and Well-being in Indigenous Australia.
She specialises in the facilitation of inclusive growth through a focus on financial inclusion, resilience and wellbeing, particularly for vulnerable communities.
When asked to define financial inclusion and financial resilience, Godinho explains that ‘financial exclusion is the lack of access to safe, affordable and appropriate financial products and services from mainstream providers.
“This means people have to rely on higher cost alternatives such as payday lenders or rent-to-buy schemes which can send people into debt spirals.”
RFi Group data has seen that while the proportion of Australians currently holding a credit card has declined, the proportion of consumers holding a personal loan or car loan has remained consistent over the last two years.
Australians aged 25-44 are the age group most likely to hold a loan, and this has not declined over time.
RFi Group data also shows that personal loans are increasingly being taken out to fund living expenses or unexpected expenses such as bills or car repairs, and less so for new cars or holiday expenses (particularly during the global pandemic of COVID-19).
"More than 3 million adults, which is 17 per cent of the adult population, are likely to be financially excluded. Those on low incomes are particularly excluded, as are Aboriginal Australians and others from non-English speaking backgrounds" said Godinho.
Godinho has professional experience as a banker and worked with ANZ for over 20 years where she saw first-hand how a lack of financial capability could have people on good incomes ending up with severe financial difficulties.
Godinho also saw how people from culturally and linguistically diverse (CALD) backgrounds were more likely to have difficulty in negotiating the financial system to their advantage.
My PhD instead showed there are ways we can build on Indigenous cultural norms, to develop strengths-based approaches to encouraging Indigenous people to use money confidently, and to meet their own financial goals
Godinho reflects that her personal passion for improving financial inclusion and wellbeing for Indigenous communities stemmed from her background growing up in India where she was shown how important cultural connections are to achieving holistic wellbeing.
When asked about what inspired her PhD thesis on financial wellbeing in Indigenous Australia, Godinho comments, "I was fascinated by how people from different cultures can have very different feelings about money, and want to use it in many different ways.
I tried to get academics interested in doing some research into cultural understandings of money but failed – so ended up rolling up my sleeves to do this research myself, with a PhD on the topic of Indigenous views on money, and what this means for financial capability and wellbeing in Indigenous Australia"
Research from the Centre for Social Impact (CSI) showed that 3 in 4 Aboriginal and Torres Strait Islander people have had some difficulty getting help from financial services in the past 12 months, with just under 71 per cent of respondents indicating they have moderate to low levels of financial knowledge and behaviour.
The research also showed that Aboriginal and Torres Straight Islander people are more likely to have high levels of financial stress compared to the general Australian population.
The research done by Dr Vinita Godinho highlighted that while Indigenous Australians are more likely to experience financial exclusion regardless of where they live, Indigenous culture should not be seen as a barrier to financial inclusion.
Godinho explains, "There is no silver bullet solution [to the over representation of Indigenous Australians among those who are financially excluded], but before I started my own research, Indigenous culture was commonly identified as being a barrier to financial inclusion.
My PhD instead showed there are ways we can build on Indigenous cultural norms, to develop strengths-based approaches to encouraging Indigenous people to use money confidently, and to meet their own financial goals. In order to do so, we must first make the effort to understand what money means to Indigenous people, and how they want to use it".
Godinho’s research found that Indigenous participants understand money in ways that are culturally distinctive from ‘Anglo-Celtic’ understandings of money, which underpin Australian financial and banking policy.
Having a more widespread understanding of ‘Indigenous money’ can therefore help banking to become more inclusive, as Godinho says, "the way a culture understands and wants to use money will definitely influence their world views on what financial capability and wellbeing mean to them".
Godinho reflected on an example where she found that participants in her research saw money as "imposed from outside" yet have adapted it into their everyday lives in culturally distinctive ways.
"In remote locations, money is seen as ‘disconnected’ from traditional Indigenous knowledge and law. In regional and urban areas, money is inextricably linked to a wider, ongoing challenge to reconceptualise Indigenous cultural identity and roles, vis-à-vis mainstream, non-Indigenous Australia. Many Indigenous people avoid managing money because of these stresses,” Godinho said.
Financial stress is costing Australian businesses almost $31 billion in lost revenue.
"To me, we need to reconcile the ‘money-story’ between the two cultures as Indigenous financial wellbeing is being compromised by feelings of stress and guilt associated with financial choices which clash with their cultural norms and identity.
"Efforts to enhance Indigenous financial capability which build on their cultural knowledge, shared values and norms are more likely to motivate participants to engage with money matters."
In the financial services industry and when looking at how financial inclusion can be improved for Indigenous Australians, Godinho reflected: “I strongly feel that money will contribute to Indigenous peoples’ wellbeing when they are able to use it how they want to.
"I have recommended several practical ways in which we can build a bridge between Indigenous and non-Indigenous understandings of money – almost a reconciliation of money if you’d like – so that Indigenous people can use money confidently to achieve their own goals."
The steps Godinho recommended include:
1. Building the financial capability of elders – National efforts to promote Indigenous financial capability are targeting the young through the formal education system, yet elders are the traditional custodians of Indigenous knowledge. Whilst acknowledging the need to provide financial education for the young, we also need to build the financial capability of elders so that they can lead their community to use money in ‘the right way’ to achieve their own goals, whilst retaining their cultural identity;
2. Enabling Indigenous people to use money for caring, and facilitating not just individual, but also family and community financial goals can motivate more people to engage with money matters; and
3. Thinking about saving as ‘caring for oneself so that one can care for others’ – Given that my Indigenous participants say they prioritise sharing over saving money, thinking about saving as ‘caring for oneself so that one can care for others’ could be a culturally-appropriate way of promoting a savings habit.’
Anna Shaw is the client insights manager at RFi Group.
2. Godinho, V. 2014. ‘Money, Financial Capability and Well-being in Indigenous Australia’. RMIT University. https://goodshepherdmicrofinance.org.au/assets/files/2016/06/Vinita-Godinho-Final-PhD-thesis-MARCH-2015.pdf
3. Weier, M., Dolan, K., Powell, A., Muir, K., Young, A. (2019) Money Stories: Financial Resilience among Aboriginal and Torres Strait Islander Australians 2019. Centre for Social Impact (CSI) – UNSW Sydney, for National Australia Bank.
4. Weier, M., Dolan, K., Powell, A., Muir, K., Young, A. (2019) Money Stories: Financial Resilience among Aboriginal and Torres Strait Islander Australians 2019. Centre for Social Impact (CSI) – UNSW Sydney, for National Australia Bank.
5. ‘Financial Wellness in the Australian Workplace’, The Behavioural Architects, 2018,