Unsecured lending and the indigenous economy in Australia and South Africa

Consumer credit is closely regulated in both Australia and South Africa. Nevertheless, unsecured lending often results in financial hardship in low‐income communities. One aspect of this picture is the impact of the consumer debt burden on the Indigenous economy, which is disproportionately affected by poverty in both countries. Here we juxtapose the comparative regulatory regimes and then contextualize the law using an inter‐disciplinary account of each Indigenous economy. We find through this law‐in‐context comparison that neither Australia nor South Africa has fully resolved the problem of Indigenous financial hardship. This mutual failure is confirmed by the recent Kobelt decision of the High Court of Australia and the drastic measures enacted in the South African National Credit Amendment Act 2019. One positive lesson that South Africa provides is that accommodating the Indigenous economy in financial regulation can promote and empower that sector.