june 8, 2011 susan henry and jean barrett
DESCRIPTION
Impact of a Microfinance Program. June 8, 2011 Susan Henry and Jean Barrett. Alterna Savings: Who we are. Created April 1, 2005 from merger of CS CO-OP and Metro Credit Union Ontario based, regional offices in Toronto and Ottawa 22 Branches 81 proprietary ABMs 120,000 members - PowerPoint PPT PresentationTRANSCRIPT
June 8, 2011
Susan Henry and Jean Barrett
Impact of a Microfinance Program
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Alterna Savings: Who we are
• Created April 1, 2005 from merger of CS CO-OP and Metro Credit Union
• Ontario based, regional offices in Toronto and Ottawa• 22 Branches• 81 proprietary ABMs • 120,000 members• Owns Alterna Bank, a Schedule 1 chartered bank• 550 employees
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Community Investment through Co-operative Structure
• Locally owned and controlled by members• Serve anyone who lives or works in the province of
Ontario• Democratic governance structure—any member can run
for the Board of Directors• Approx. 85% of funds deposited are returned to the
community in the form of loans and mortgages to members—money stays local
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What is the Community Micro Finance Program
Micro Finance:• Proven economic and social structure that provides
financial services to low-income households• The activities usually involve small loans for working
capital with access to repeat and larger loans• Major component to micro finance is SAVINGS
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Community Economic DevelopmentCommunity Micro Finance Program-GTA• Established in June 2000• Provides business loans and full financial services to self-
employed individuals who cannot access credit from traditional financial institutions
Our Focus• Low income individuals• Self-employed individuals • Business start-ups
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Small Loans Big Impact
• Loan amount ranges between $1,000 and $15,000• Interest rate is prime + 6%• Administration fee is 6% of the amount borrowed• Terms range from 1 to 5 years• To date almost $2 millions in loans have been granted to
over 400 entrepreneurs• 90% repayment rate
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Partnerships and Collaboration
1. Ottawa Community Loan Fund
2. Access Community Capital Fund
3. Youth Micro Loan Initiative
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Community Micro Loans-Ottawa
• Partnership with The Ottawa Community Loan Fund• OCLF is a non-profit organization established in July 2000• Provides community investment loans• Small Business Loans• Accreditation & Training Loans• Social Enterprise loans
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Access Community Capital Fund
• The loan fund has been in operation since 1999.• Alterna administrates this loan program based in the
Riverdale neighborhood.• Access Community Capital funds are used to guarantee
loans through Alterna Savings. • The fund was created by investments from socially
minded individuals, organizations and businesses.
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Youth Micro Loan Initiative
• Collaboration between the City of Toronto, Toronto Community Housing, Toronto Community Foundation and other community partners
• Intensive Social Enterprise/business training program• Focus on youth from marginalized/priority neighborhoods• Develop life skills and business development skills
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Key Findings
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Individual Level
Income increase: Incorporated Businesses
+$3000 in 50% of borrower
+$10,000 in 33% of borrowers
Income increase: Incorporated Businesses
Up to $5,000 in 45% of borrowers
+$10,000-$15,000 in 33% of borrowers
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Individual Level
Housing:
• 70% have better housing than before• 21% increase in home ownership• 19% reduction in those who rent
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Individual Level
Household Level:
• 61% financial stability• 47% asset purchase• 33% better nutrition• 66% small business is the primary source of income
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Corporate Level
Strategic information:
• 62% of borrowers are female• 75% received one loan only• 90% paid back on time• 82% of loans served to set up new businesses
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Policy Level
Higher taxes
• 95% of respondents still running same business• 66% of small businesses-primary source of income• 37% hired 2 employees• 25% hired 4 or more employees
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Policy Level
Governmental assistance:
• 42% of borrowers were benefiting from governmental assistance before entering the program – only 21% were still benefiting after the program
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Policy Level
Barriers to credit:
• -37% of the respondents had contacted other financial institutions before Alterna (43% among them had contacted 2 banks and 29% had contacted 3) but only 1/3 of them actually received a loan from other financial institutions
• -Alterna was the only source willing to finance the borrowers(60%)
• -What if Alterna had not been there?