Helping Native Hawaiians Obtain Financial Capital

by OHA Trustee Keli‘i Akina, PhD, Ka Wai Ola, May 1, 2022

In 2017, Uʻilani Corr-Yorkman needed financial help to open her Hāloalaunuiākea Early Learning Center in ʻEleʻele, Kauaʻi. She looked to OHA for financial assistance and applied for a business loan through the Native Hawaiian Revolving Loan Fund (NHRLF). Today, the Hāloalaunuiākea Early Learning Center is a school where keiki love to learn. OHA’s NHRLF has made a positive impact on the life of Uʻilani Corr-Yorkman and the ʻEleʻele community.

There are many success stories of Native Hawaiians benefiting from financial capital through the NHRLF.

Access to financial capital helps individuals and ʻohana increase their income and wealth. Increased income and wealth lead to greater social mobility. For Native Hawaiians, access to capital is essential to promote financial and social empowerment. However, many Native Hawaiians lack capital and, as a result, have limited opportunities to attain adequate housing, jobs, education, and health care.

According to a recent study conducted by the Native Hawaiian Chamber of Commerce, Office of Hawaiian Affairs’ System Office, Liliʻuokalani Trust, and the Kamehameha Schools’ Strategy and Transformation Group, nearly 60% of Native Hawaiian-owned businesses identified access to capital as the most needed resource. Over 72% of Native Hawaiian businesses in Maui County reported a need for greater access to capital.

As a Trustee, one of my top priorities has been advocating for OHA to use our trust funds to address the real “bread and butter” needs of OHA beneficiaries such as housing, jobs, education, and health care. I believe one way to address these “bread and butter” needs is to expand access to capital through the Native Hawaiian Revolving Loan Fund (NHRLF).

The NHRLF provides Native Hawaiians and their ʻohana with vital financial resources. These resources enhance access to credit, capital, and the ability to create jobs. The NHRLF offers loans for education, business development, home improvements, personal use, and debt consolidation. The “revolving loans” are designed to ensure that when loans are paid off, the repaid funds are then used to offer more loans to Native Hawaiians.

On March 8, 2022, Aikūʻē Kalima, OHA Loan Fund Manager, made a presentation to the OHA Board that highlighted the successes and challenges of the Revolving Loan Fund. It was noted that loans have been distributed equitably throughout the Hawaiian Islands. Borrowers improved their overall economic wellbeing during the loan period. Education and business loan borrowers were able to increase their income. Borrowers’ financial and non-financial assets increased over time. In addition, Native Hawaiian-owned businesses with NHRLF loans improved their financial performance.

Despite its many successes, the Revolving Loan Fund also has some limitations. According to Kalima, the NHRLF is currently unable to provide certain loan products. For example, loans cannot be issued for the “purchase of land” or the “purchase or construction of buildings.” In addition, loans cannot be disbursed to “purchase financing equity in a private business.” Furthermore, funds cannot be used as an “investment in high-interest accounts.” Kalima also added, “the other issue is that businesses must be 100% Native Hawaiian-owned” and NHRLF must be “a lender of last resort.” Kalima recommends that OHA address these limitations.

Overall, Kalima makes some valuable suggestions on how to increase access to capital for more beneficiaries. Perhaps in the future, loan options could be expanded to include other products like mortgages. In the meantime, the Revolving Loan Fund continues to provide essential access to capital. This capital promotes the financial and social empowerment of our beneficiaries and puts Native Hawaiians on a path toward greater social mobility.

For more information about the Native Hawaiian Revolving Loan Fund including success stories and loan requirements, please visit loans.oha.org/. Your feedback on this column is welcomed at TrusteeAkina@oha.org.