Media Advisory: Beyond $2 Billion
(OTTAWA, Ontario, November 25, 2014) - Aboriginal Financial Institutions grow a federal government investment of $240M into $2 billion in loans to Aboriginal small businesses for economic development.
The National Aboriginal Capital Corporations Association ("NACCA") is an association of 55 Aboriginal Financial Institutions (AFIs) throughout Canada. AFIs were established by Aboriginal leaders and the Canadian government in the mid-1980s to early 1990s to stimulate business development in the Aboriginal community. The Saskatchewan Indian Loan Company, now part of Saskatchewan Indian Equity Foundation (SIEF), was the first AFI to provide loans totaling $173,500 to Aboriginal entrepreneurs in 1985-86. The network of AFIs has since grown and matured into a significant developmental lending force in Canada with unparalleled reach.
From the time when AFIs were formed with capital of about $200 million, they have lent more than $2 billion to Aboriginal businesses. The $126 million of loans AFIs provided in 2013, together with equity leveraged, operating expenses incurred, programs and projects delivered, had a combined direct economic impact of $265 million.
"NACCA knows that safe, affordable access to capital supports First Nations, Métis and Inuit people in creating jobs, growing businesses and contributes to vibrant, healthy communities," says NACCA Chairperson Warren Sault. Indeed, Aboriginal businesses supported by AFI loans create or maintain about 3,600 to 4,000 full time jobs every year.1
Providing the right environment for Aboriginal businesses to succeed includes access to capital and business support services. The AFIs approach of providing lending and training has contributed to building credit and repayment practices as well as financial literacy within the Aboriginal marketplace. For instance, AFI lending practices have resulted in:
- AFI borrowers repayments are nearing $1.6 billion;
- AFIs have turned the $240 million Government investment over 8 times while limiting writeoffs to $108 million or 6.75 % of the loans provided. Write-offs are largely offset through principal and interest payments on performing loans.
- The consolidated AFI gross loan portfolio which is in excess of $300 million is expected to cycle yet again over the course of the next 3.5 years and remain available for future generations.
NACCA and AFIs are well-positioned to continue to enhance economic development opportunities with unparalleled reach in Aboriginal communities.
The Chair of the Board of NACCA, Warren Sault, and Honourable Minister of Aboriginal Affairs and Northern Development Canada, Bernard Valcourt will join the Aboriginal Financial Institutions to celebrate this milestone November 26, 2014 at 5:30 PM at the Hotel Lac Leamy. Aboriginal Affairs and Northern Development Canada play a key role in supporting the Aboriginal Business Financing Program, an essential component of the organization's lending stream.
For inquiries, please contact:
CEO, National Aboriginal Capital Corporations Association (NACCA)
1 Each part-time or seasonal job created has been counted as 0.4 FTE jobs.