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?

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Thank You!

For more informationSusan Henry, Manager Corporate Social ResponsibilitySusan.Henry@alterna.ca416.252.5625 ext. 7617