Government of Canada Partners With Business Development Bank of Canada to Improve Financing for First Nation Businesses
Ottawa, Ontario –(April 24, 2009) – The Honourable Chuck Strahl, Minister of Indian Affairs and Northern Development and Federal Interlocutor for Metis and Non-Status Indians, today announced an innovative partnership with the Business Development Bank of Canada (BDC) to provide debt financing to First Nations businesses across Canada with assets on a reserve.”The Government of Canada is working with financial institutions across the country to address some of the long-standing barriers to the growth and competitiveness of First Nation businesses,” said Minister Strahl. “I would like to commend the Business Development Bank of Canada for its participation in this unique initiative and for its shared commitment to Aboriginal economic development.”
Under the arrangement, Indian and Northern Affairs Canada (INAC) will provide $3.2 million to establish a loan loss reserve fund with the Business Development Bank of Canada. The reserve fund will be used by financial institutions as collateral to finance loans to medium and large First Nation businesses with the assets needed to secure the loan located on a reserve.
“We want to see better access to capital for Aboriginal entrepreneurs so they can create and sustain small business ownership locally,” said Wilson Neapew, National Director, Aboriginal Banking at BDC. “Through this partnership, BDC will extend its reach to entrepreneurs by providing them with the financial support they need to start and grow businesses.”
INAC’s pilot Loan Loss Reserve Initiative will make First Nation businesses more competitive by addressing certain historical impediments to debt financing, including provisions in the Indian Act that prohibit the use of reserve land as collateral. The reserve fund works by offsetting a portion of the lender’s potential losses on loans to First Nation businesses.
BDC is Canada’s business development bank. From 100 offices across the country, BDC promotes entrepreneurship by providing highly tailored financing, venture capital and consulting services to entrepreneurs. Visit www.bdc.ca for more information.
Through the Loan Loss Reserve Initiative and other Aboriginal economic development measures, the Government of Canada is demonstrating its continued commitment to increasing Aboriginal participation in the Canadian economy.
This release is also available on the Internet at www.inac.gc.ca
For more information, please contact
Office of the Honourable Chuck Strahl
Nina Chiarelli, Press Secretary
Indian and Northern Affairs Canada
Business Development Bank of Canada
Media Relations Manager