Wednesday, July 23, 2014
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Micro-lending offers big opportunities for small business

Richard Watts / Times Colonist

First Nations student Aarden Nehring has heard it many times — a big corporation, usually a resource company, struts into a native community proclaiming it has come with a great opportunity.

But once a deal has been reached, benefits to the people of the native community never seem to equal what was promised.

“I happens all the time in Alberta and the rural areas,” said Nehring, 22, originally from the Montreal Lake Cree Nation in central Saskatchewan. “A big corporation just steps onto the land and says: ‘We need some of your resources.’”

But now, as a student in Camosun College’s Indigenous Business Leadership Program, Nehring was intrigued by a presentation from Victoria’s Community Micro Lending made to his class in January.

Community Micro Lending didn’t come with an offer or a pitch for a deal. Instead it asked for help, with introductions and publicity to First Nations individuals who have ideas for a business but need a small loan, up to $5,000, to get started.

Nehring liked what he heard about Community Micro Lending, particularly its offer of business mentors. And he was intrigued by the notion he and his classmates are being tasked with getting the word out to aboriginal communities.

“It seems like it is about getting the right people to the right people,” Nehring said.

Community Micro Lending started about four years ago to help people get small businesses off the ground, with small loans, up to $5,000 to start.

An applicant is helped to develop a business plan and a budget. The applicant then pitches the loan to a loan committee and if it passes, the application is posted online.

People viewing the website can then agree to finance part or all of the loan request. The borrower pays back the loan with 10 per cent interest, with two per cent going to the lender and the remainder going to Community Micro Lending to fund the operation.

So far, Community Micro Lending has made 20 loans, the smallest being $1,000. But it has helped more than 250 people develop business plans or ideas or even do enough work to realize their idea was not viable to start.

During its operation, Lisa Helps, executive director of Community Micro Lending and a Victoria city councillor, said the organization has long recognized the potential for small business opportunities amongst aboriginal people.

It could be anything from a janitorial company with a contract to clean the band offices that needs money for supplies.

Or it could be someone who has plans to sell moccasins online or to tourists, “We have seen a whole kind of bubbling up of aboriginal entrepreneurship in the region,” Helps said. “And there is not really any kind of access to capital on a small scale.”

About three years ago, at the behest of a local businessman, the organization was handed $40,000 specifically to lend out to aboriginal entrepreneurs looking to start small businesses. But Helps said only one loan has been awarded of $5,000.

Helps said the holdup was entirely at Community Micro Lending. People at the organization, mindful of a history of colonization, were hesitant about walking into native communities with an offer of money.

They want the program to be a success for native entrepreneurs. But they were nervous they would put a cultural foot wrong, possibly even cause offence and put the program at risk right from the start.

“The challenge has been none of us [at Community Micro Lending] are aboriginal, so the challenge has been making contacts and connections,” Helps said.

So the organization has teamed up with Carole Anne Hilton of Camosun School of Business and her class, Indigenous Business Leadership, special projects.

The project for the students will be to develop a program, or a strategy, to get the word out to native people about Community Micro Lending and its possibilities.

Hilton said the timing couldn’t be better for Community Micro Lending and the First Nations communities. It’s a moment when aboriginal young people are increasingly enrolling in business courses.

“People within the native communities are starting to say: ‘OK, there are only so many band office jobs, only so many jobs at the universities or the local friendship centre,’” Hilton said.

“The only way more jobs are being created is through business development,” she said.

And in a few ways, there is already a small advantage for some native small businesses. They have an existing market among their own people.

Artists and artisans, for example, have a market for cultural products for use in cultural ceremonies, potlatches or pow wows.

“And they are not looking for $50,000 $60,000 or $70,000 loans,” Hilton said. “They are looking for a few thousand to buy some silversmith tools or carving tools, that sort of thing.”

Meanwhile, Lilybell Louie, Nehring’s classmate in Indigenous Business Leadership, said she sees some big potential for Community Micro Lending, and her class’s project of taking information about it to the various native communities.

Louie, 32, a member of the Songhees First Nation, said she hopes the information and communication will ultimately be two-way.

People in native communities should be able to learn more about business opportunities. But just as much, non-aboriginals should get a chance to know about native peoples.

“Every band is different,” Louie said. “Every band has its own unique culture and traditions.”

The increased conversation will ultimately make for a better business environment for everyone.

“It would give people the opportunity to know us more, know about our culture and our background,” Louie said.

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