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June 8, 2011 Susan Henry and Jean Barrett

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

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June 8, 2011 Susan Henry and Jean Barrett

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  1. Impact of a Microfinance Program June 8, 2011 Susan Henry and Jean Barrett

  2. 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

  3. 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

  4. 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

  5. Community Economic Development Community 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

  6. 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

  7. Partnerships and Collaboration • Ottawa Community Loan Fund • Access Community Capital Fund • Youth Micro Loan Initiative

  8. 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

  9. 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.

  10. 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

  11. KeyFindings

  12. IndividualLevel 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

  13. IndividualLevel Housing: • 70% have better housing than before • 21% increase in home ownership • 19% reduction in those who rent

  14. IndividualLevel Household Level: • 61% financial stability • 47% asset purchase • 33% better nutrition • 66% small business is the primary source of income

  15. CorporateLevel 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

  16. PolicyLevel 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

  17. PolicyLevel Governmental assistance: • 42% of borrowers were benefiting from governmental assistance before entering the program – only 21% were still benefiting after the program

  18. PolicyLevel 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?

  19. Thank You! For more information Susan Henry, Manager Corporate Social Responsibility Susan.Henry@alterna.ca 416.252.5625 ext. 7617

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