Micro loans take Ontario Natives by storm

Page 6

Provincial

Aspiring entrepreneurs no longer need an exceptional sense for success or enormous capital assets to make it in today's competitive market place. All they need is an idea, self-confidence and support, says Gord Cunningham, spokesman for Calmeadow Charitable Foundation in Toronto.

Community-based business groups are the wave of the future and the new concept is ready to pour into Alberta's Native communities, he says.

The Native Self-Employment Loan Progran (NSELP) has taken three Ontario communities by storm. They are now beginning to feed off their own success. Because, Cunningham says, keeping business ventures small and to the point, makes it easier for them to keep their heads above water.

Micro-enterprises were already an important feature to many small Canadian communities, but Native bands weren't quite able to master the techniques of acquiring bank loans to

set them up.

Cunningham, Calmeadow field officer, says his foundation devised a plan which would allow bands to control their own financial base of operation. Given the willingness and co-operation of the communities involved, the NSELP can help Natives take stake in their own lives.

By putting financial planning at the communities' fingertips, it is easier for a start-up business to have a chance. Cunningham says a "borrowers' circle" can be established where community members decide who gets a loan and who doesn't.

After establishing Phase 1 of their three-year pilot project (1987-89). Cunningham says it has become time to vest interest in other parts of the country. The Ontario communities of Wikwemikong, Sachigo Lake and Kettle Point have managed to overcome the obstacle that has previously hindered potential Native entrepreneurs - lack of formal credit access. Now there are about 150 businesses operation on these reserves.

While Calmeadow finances a revolving loan-base at the local band for $3,000, it is up to circle members to make sure the loans are appropriately distributed among borrowers. This way, says Cunningham, entrepreneurs don't need all the requirements that come with a commercial bank loan, including collateral and a financial track records.

Extensive research indicated micro-businesses create a solid bonding between local enterprises and local residents by providing affordable goods and services and by creating employment opportunities.

Not only is the NSELP good for the thriving small businessmen, but it's good for the whole community, Cunningham stresses.

"It has a positive impact on the self-confidence of the whole society it's in. It's doing good for people. And it won't be something where they'll lose their shirts."

Whether it be a backyard mechanic or basement toaster repairman, the community borrower circles can help develop an idea and put it into action. The initial loans for approved operations are $1,000 maximum. As soon as the borrower pays off that loan they are eligible for another $1,500. Third loans have a ceiling of $3,000.

Phase II of the NSELP is designed to establish credit delivery mechanisms with financial institutions in other parts of the country in preparations for additional Native community-based loan circles.

Ronda Groom, executive director of the Lesser Slave Lake Community Futures Committee, says she's already looking forward to setting up loan circles in her area.

Groom says she is in the process of evaluating the NSELP for implementations in the Northern Alberta region even though her organization already has a loan program in place.

"The businesses we deal with now - many Native owned - are larger, more established companies.

"It all depends on what you're trying to do. Sometimes it's good to start small and then maybe get bigger." Establishing a credit base with the band through micro-loans is essential for some businesses.

"There's room for both types of business here."