A report by the NZ Families Commission and the Ministry of Pacific Island Affairs, Pacific Families and Problem Debt, found a combination of factors had made it difficult for many to "keep their heads above water financially".
It said loans from fringe lenders were becoming an increasingly common source of short-term finance for people in lower socio-economic groups who do not qualify for credit from mainstream providers.
Families Commissioner Dr James Prescott said for the majority of Pacific peoples studied, the ability to get a quick loan from a fringe lender, compared to a bank, was more important than the terms of the credit contract.
Causes of debt among Pacific Islanders in NZ
- Borrowing from fringe lenders
- Donating to churches
- Remitting money back to family members living in the Pacific Islands
- Information gaps
- Student loans
Dr Prescott said social status was extremely important within Pacific communities and that it was contributing to some people's debt levels.
"Social status is extremely important among Pacific Island people and admitting that you are struggling financially becomes a bit of a pride issue," he told Radio Australia's Pacific Beat program.
"It's destroying families."
Dr Prescott said loan sharks were working within the law but that the law was "very much skewed in their favour and they're obviously using that to their best advantage".
The research also found many struggled to say no to extended family, church and community events, causing an "emotional and spiritual struggle".
Reverend Tevita Finau, from the Mount Hermon Methodist Tongan Church, said there were "only a few" who got into debt repaying the church.
"I think we are talking here about a very few who are a bit extravagant with what they give or giving more than they should or can afford."