Willis orders inquiry into rural banking competition in New Zealand

Finance Minister Nicola Willis has initiated an inquiry into the state of competition in New Zealand’s banking sector, focusing on rural areas.

She has written to the chairs of the Finance and Primary Production committees, emphasising the need for a competitive banking sector to support the rural economy. This inquiry is part of the coalition agreement between National and New Zealand First, aiming to address farmers’ decreasing satisfaction with banking services. The inquiry will examine competition in business and rural lending, barriers to competition, and the regulatory environment’s impact on efficient lending access.

ACT MP and Primary Production Committee chairperson Mark Cameron and Rural Women New Zealand (RWNZ) have expressed support for the inquiry. Cameron has highlighted concerns from farmers about the disparity between rural and urban bank lending practices. RWNZ chief executive Gabrielle O’Brien noted that members face issues such as limited access to lending, high interest rates, and the closure of rural bank branches and ATMs.

The inquiry will gather evidence from financial market regulators and banks operating in New Zealand to ensure that the banking sector meets the needs of rural communities, supporting the food and fibre sector, which constitutes 10% of New Zealand’s GDP.

Image credit: Richard Bell