Co-operatives in rural Canada got loans and credit in 2007 much more readily than their urban counterparts, a new Statistics Canada survey shows.
Overall, StatsCan said, the “vast majority” of co-operatives got all they asked for in new or additional loans, lines of credit or credit cards, but about 20 per cent of co-operatives surveyed felt “trying to obtain financing of any kind was a serious obstacle to the growth of their organization.”
Among all Canadian co-ops surveyed, 35.2 per cent had applied for financing, while 14.2 per cent applied for new or additional loans or credit. Of those, 88.9 per cent got the full amount requested, StatsCan said Dec. 3.
Those most likely to have made a request for any type of financing were in the Atlantic provinces (46 per cent). Co-ops in the Prairie provinces were least likely (22.6 per cent) to do so.
Co-operatives in Quebec were most likely to seek new or additional loans or credit (23.2 per cent) while the Prairie co-ops (5.8 per cent) were least likely. The Prairie co-ops, however, were most likely to get the full amount requested (98.2 per cent). Co-ops’ requests in Atlantic Canada (76.7 per cent) were least often fulfilled.
The proportion of rural cooperatives that applied for financing was “virtually identical” to urban co-operatives, StatsCan said, but 95.2 per cent of rural co-ops across Canada got the full amount requested, compared to just 73.3 per cent of urban co-ops.
About 64 per cent of cooperative start-ups applied for financing, more than twice the 28 per cent for “mature” cooperatives, StatsCan reported.
John Anderson, director of public policy for the Canadian Co-operative Association, said Dec. 3 he was “pleased” to see the majority of co-ops that ask for external financing get it, but added he was “concerned” that financing remains a barrier for some co-op businesses.
“It is good to see that financial institutions are increasingly recognizing that coops are legitimate business enterprises, and deserve to be treated as such,” Anderson said in a release.
According to the association, there are about 8,800 cooperatives in Canada, employing over 150,000 people.
The StatsCan survey is jointly sponsored by the Co-op Secretariat in Agriculture and Agri-Food Canada and Human Resources and Social Development. It didn’t include housing co-ops, nor financial co-ops such as credit unions.