Vancity Shared Growth Funds to Invest in Local Microfinance to Alleviate Poverty

VANCOUVER, March 14 – Vancity has enhanced its Shared Growth term deposit by designating funds for investment in its local microfinance programs, including peer lending. With this change, a portion of the Shared Growth proceeds will now help micro-entrepreneurs, including new immigrants and refugees, people with disabilities, aboriginal people and residents of the Downtown Eastside overcome the barriers faced when trying to borrow money due to lack of collateral, personal credit history and full-time employment.

Vancity members can purchase a RRSP-eligible Shared Growth term deposit at a guaranteed competitive rate. Shared Growth funds, currently amounting to $4.5 million, are then invested in projects and programs with a high social or environmental value. The announcement coincides with today’s Vancity-sponsored visit of Nobel Peace Prize Laureate Professor Muhammad Yunus to Vancouver where he will receive an honorary degree from UBC. He will also participate in a panel discussion on corporate social responsibility including Vancity Board Chair Patrice Pratt who will provide an overview of Vancity’s involvement in microfinance, both locally and internationally.

Vancity’s peer lending program, a group-based community microcredit initiative, is modeled after the lending circles pioneered by Professor Yunus and his Grameen Bank more than 30 years ago in Bangladesh.

Peer lending is a unique credit arrangement whereby a small group of borrowers, usually three to six people, come together to provide an equal measure of peer support and peer pressure to “morally” guarantee each other’s loans in lieu of collateral. Vancity then arranges individual loans starting at $1,000 and escalating up to $5,000. Program participants use the loans to purchase equipment and tools, manufacturing supplies or inventory to start up home-based businesses.

In operation since 1998, Vancity’s peer lending program has assisted more than 1,000 entrepreneurs to develop business and financial skills, generate income, establish credit, and perhaps most importantly, build self esteem to make the transition to self-reliance.

The peer lending program has grown since its inception — increasing 58 per cent in 2007 — and is anticipated to further increase as the need escalates. Vancity recently formed a number of lending circles to support urban aboriginal peer borrowers.

Vancity’s association with Professor Yunus dates back to 2006 when he reviewed Vancity’s Microcredit Toolkit — a peer lending resource — at the Microcredit Summit in Halifax.

“I congratulate Vancity for providing access to microcredit loans for low income entrepreneurs and new Canadians who have challenges with access to financial services,” remarked Professor Yunus in his endorsement of the Toolkit. “The Vancity Microcredit Toolkit will help expand microcredit in North America and allow organizations to use microcredit to empower their clients, create livelihoods and alleviate poverty from below.”

Since the introduction of the Toolkit, it has been accessed by more than 1,000 organizations world-wide.

While the work of Professor Yunus was the inspiration for Vancity’s involvement in microfinance over a decade ago, the real impetus was the growing incidence of poverty in the Lower Mainland and the lack of solutions when it came to financial services. “Helping communities to thrive and prosper
has always been a goal for us,” says Ellen Pekeles, senior vice-president, strategy, and responsible for Vancity’s community leadership initiatives. “To witness what can happen when someone is able to have hope and see a future as a contributing member of society demonstrates that microfinance has a vital role in effecting positive change in our communities.”

Other Vancity microfinance programs and products include the Shared World term deposit which invests in international community loan funds. In 2006, Shared World was made available nationally through Citizens Bank of Canada. Vancity also offers specialized programs for new immigrants to re-certify or upgrade their skills to Canadian standards.

For more information on peer lending at Vancity, visit:
www.vancity.com/peerlending

About Vancouver City Savings Credit Union

Vancity is Canada’s largest credit union, with $14.1 billion in assets, 390,000 members, and 59 branches throughout Greater Vancouver, the Fraser Valley, Victoria and Squamish. Vancity owns Citizens Bank of Canada, serving members across the country by telephone, ATM, and the Internet. Both Vancity and Citizens Bank are guided by a commitment to corporate social responsibility and to improving the quality of life in the communities where we live and work.

For further information: Media Contact: Jane MacCarthy, P: (604) 877-4539, C: (778) 837-0394, Jane_maccarthy@vancity.com