The Nishnawbe Aski Development Fund (NADF) is teaming up with Lac Seul First Nation to promote micro-loans to aspiring entrepreneurs in northwestern Ontario.
A fund of $20,000 was created by matching contributions from Lac Seul's Obishikokaang Development Fund and NADF to establish a peer-lending circle.
The 1,500-member First Nation, located northwest of Sioux Lookout, is comprised of the communities of Kejick Bay, Whitefish Bay and Frenchman's Head.
NADF general manager Colleen Martin said Lac Seul was a good place for the first pilot because of the entrepreneurial mindset there.
The fund will be administered by a local committee comprised of two representatives from each of the three settlements.
“We expect the majority of the loans to be around $1,000,” said Martin. “If they're successful and they have a lot of activity, it could grow from the $20,000. It depends on the success of the circle, but we expect the success rate to be high because of the character lending aspects.
“They (the members) know these individuals from the community, so they know if they have the perseverance, honesty and trust to start the business, and repay the amounts that are lent.”
Getting access to capital has always been a challenge for Aboriginal business owners and NADF was looking for new ways to help entrepreneurs get the financing they need.
Martin said the discussion for a micro-loans initiative began in the 1990s, about the same time that these programs became very popular among First Nation communities in southern Ontario.
Talks with Lac Seul started six years ago, but the challenge for the First Nation was always coming up with the funds because most communities' economic development budgets are tight. That was solved through NADF's partnership with FedNor.
Martin credits Lac Seul's Sam Manitowabi, general manager of the local economic development corporation, and his colleague Colleen Littledeer, for developing the documentation to administer the fund.
Martin said they also spoke with Thunder Bay's PARO Centre for Women's Enterprise, who is experienced with establishing peer lending circles.
“They emphasized the idea that providing support to the individuals who are accessing these funds, and the character lending (aspect) are two key components of success.”
Martin is hopeful the success at Lac Seul will lead to more program rollouts across the region as local entrepreneurs tap into possible business ventures to support the growing natural resource sector.
“We would love to see every community have a micro-loan fund. For us, it's too expensive to administer a small loan through our office. It would be great if we could get all the communities on board and it would help develop an entrepreneurial culture in the northwest.
“With all the development happening, there are lots of opportunities.”
The Nishnawbe Aski Development Fund is a Thunder Bay non-profit organization that services the Nishnawbe Aski Nation communities of northwestern Ontario. NADF provides commercial loans, grants, property appraisals, business counselling, community strategic planning and advisory services in mining and energy to First Nation communities.