A colleague recently wrote us and noted that we rarely cover the American Indian community in this blog. She was correct. We confess that our oversight is probably a reflection of a broader cultural blindness to Native American social issues in general. Perhaps this numbed sensitivity comes from the fact that Native Americans do not make as much noise as other underprivileged minorities. It seems to be part of their native dignity to suffer in silence without complaint and, unfortunately, in American social justice “the squeaky wheel gets the oil”.
Unlike the dynamic of the great melting pot that immigrant minority cultures slowly accommodated themselves within, Native Americans were settled onto separate “reservations” across the country and micro-economies had to evolve within each tribe’s settlement. Agriculture and mining were the main industries that offered marginal employment, but agriculture remained primarily an entrepreneurial endeavor as most Native Americans were independent farmers and ranchers. After one hundred years, these evolutionary micro-economies are still struggling to access necessary financing. A 2016 Treasury Department Community Development Financial Institutions Fund report found that:
“Native communities still are significantly handicapped by limited access to capital and credit, particularly in comparison to non-Native communities, and this continues to negatively affect their development prospects. In fact, given ongoing economic development, the effective demand for capital and credit may be greater now than it was in 2001. To keep moving forward, Native communities need to gain access to much more capital and credit from current and as-yet untapped sources.”
The report documented unique challenges facing these communities such as a lack of financial institutions on or near American Indian lands, lenders and investors failure to understand tribal governments and their legal systems, inflexible bank rules and regulations, and the inadmissibility of trust land as collateral. These, taken together with other challenges such as poor credit histories and discrimination against American Indians, help explain the severe capital shortfall.
The Economics of Nutrition
A report by Derrick Rhayn in Nonprofit Quarterly demonstrates the close connection between economic and health issues on Native American lands.
“There is a gap between the number of farms located on reservation lands and the number of farms on reservation lands owned by American Indian entrepreneurs. This not only means that farm lands are being used by outside owners to profit on native owned lands, but also means that food grown on American Indian lands leaves for outside markets. For many American Indian communities, the implications of having their agricultural land used by outside owners translates into an economic drain on their communities, as well as a lack of access to food. In fact, according to a recent article in the Journal of Hunger and Environmental Nutrition exploring food insecurity among American Indian communities, American Indians are twice as likely as whites to lack access to safe food, which leads to high incidences of chronic diseases.”
CDFIs to the Rescue
Community development financial institutions (CDFIs) are private financial institutions that are 100% dedicated to delivering responsible, affordable lending to help low-income, low-wealth, and other disadvantaged people and communities join the economic mainstream. Native Community Development Financial Institutions are becoming major contributors to the continued growth of capital and credit access on native lands. They are providing much needed capital for entrepreneurs, as well as consumer products and American Indian financial literacy education efforts. Native CDFIs are critical to the ongoing development of a strong financial infrastructure on the more than 550 tribal nations that exist throughout the United States.
This blog would like to thank our social worker colleague for waking us up to social issues in our own backyard. As she said in her text:
“Our society spends hundreds of millions of dollars trying to alleviate the plight of underprivileged minorities from the Middle East to Africa and around the world. Why do we walk past the grinding poverty cycle of Native Americans right here in our own backyard? The media rarely covers native issues and few people I know could even name two noble American Indian tribes. Perhaps it’s a sense of guilt that causes this blindness.”