A partnership between IBA and the National Australia Bank (NAB) is providing Indigenous entrepreneurs with greater prospects of turning their business dreams into reality.

The NAB’s award-winning Microenterprise Loan Program has been providing unsecured business loans, financial products and services to people on low incomes, with few or no avenues for accessing affordable business credit since 2007.

In December 2009, IBA and NAB joined forces and launched the Indigenous Entrepreneur Microenterprise Program (external website, new window) (IEMP). Both organisations are committed to social inclusion initiatives that help Indigenous Australians build and establish businesses, attain financial independence and reach their economic potential.

The IEMP provides financial assistance through NAB’s microenterprise loans, with business advice, support and mentoring provided through IBA’s national network of business consultants. This means Indigenous entrepreneurs can receive the assistance they need during the crucial establishment period of their business, while forming an ongoing relationship with a major bank.

The Indigenous Entrepreneur Microenterprise Program

The NAB provides microfinance on a not-for-profit basis to support a new or existing business of five or fewer employees. Key features include:

• loans from $500-$20,000
• a fixed interest rate (currently 5.99%)
• up to three years repayment period, and
• a 90 day interest free access period.

IBA pairs its clients with a business consultant who has extensive knowledge of the relevant business area. This support enables clients to:

• develop a sound business plan
• have access to a ‘sounding board’ to consolidate business ideas, and
• identify personal and business skills and strategies they may need in the critical first years of business operation.

While financial assistance is important, both IBA and the NAB acknowledge that business literacy and a transfer of skills and knowledge to new business owners are key to long-term economic development.

Indigenous small business owners face unique challenges and ‘disablers’ in starting and succeeding in business. These include:

• underdeveloped business networks through which to access advice, suppliers and customers, and
• a lack of generational role models, as setting up a business is often something that has never happened within the new business owner’s family before.

(Australian Taxation Office 2009, Indigenous small business owners in Australia, Canberra p11.)

IBA Deputy Chair Bob Blair said: ‘There is generally a lack of family and community understanding about running a business, because the Indigenous business community is so small. So this is where our mentors play an important role.’

To date, the average loan under the IEMP has been $17,500, with funds typically used to purchase plant and equipment, stock and leases, and to implement marketing strategies and promote products and services.

Imran Lum, Community Finance and Development Manager at the NAB said: ‘Through this important community partnership with IBA, NAB’s not-for-profit microenterprise loans will provide a practical way to encourage financial independence for more Indigenous Australians.’

For further information about the program:

• visit the NAB website (external website, opens new window)
• contact your local IBA office, or
• Freecall 1800 107 107.