Many financial institutions don’t understand how co-operatives work and are less likely to loan them money
Assiniboine Credit Union is helping lead the creation of a national Co-operative Investment Fund that will provide essential loans for growing and expanding co-operatives across Canada.
“The idea for the fund is driven by national research that shows there is a gap in financing for co-operatives in part because many financial institutions do not understand the common ownership, control and capital structures of co-operatives and are less likely to loan them money,” says ACU’s president and CEO Al Morin.
“Credit unions, which are financial co-operatives, understand and value the co-operative model and we are the best positioned to work together nationally to make a difference in the growth of established co-operatives,” Morin said.
“When you look at the purpose of co-operatives they are typically dedicated to addressing social, economic and environmental issues. So by supporting them we support the success of enterprises that create positive change in our communities,” he added.
ACU has teamed up with Vancity Credit Union, The Co-operators and the Canadian Worker Co-operative Federation (CWCF) to collectively pledge more than $6 million to help establish the national fund. The goal is to launch the fund later this year with between $20 million and $40 million in pledges. The fund will operate as a co-operative with a board of directors that has representation from the groups impacted by the fund. Co-operatives that invest in the fund will receive a return on their investment.
“ACU along with Vancity, The Co-operators and CWCF are illustrating strong leadership in coming onboard as founding investors. The confidence that they have shown in the vision of the fund will be welcomed throughout the sector,” said Kim Andres, project manager for the fund.
Inspired by the 2012 International Year of Co-operatives, the fund is being created under the leadership of the Canadian Co-operative Association (CCA) with the support of a dedicated task force of co-ops and credit unions from across the country. It will be an important vehicle that co-operatives can leverage to grow and expand their contributions to communities across Canada, strengthening the co-operative sector and the many communities and individuals whose needs co-operatives meet, said Andres.