When Lou Ann Solway was trying to start a ranching business on Alberta's Siksika Nation reserve two decades ago, banks wouldn't give her the time of day. She had inherited 10 head of cattle and needed financing to purchase 20 more. Despite owning a small herd as collateral, and having lifelong experience ranching, bank after bank turned her down.
"I was aboriginal, I was a woman. I remember one banker saying, 'only men do this,' although not in so many words," said Ms. Solway, now a successful rancher with a herd of 120 calving cows on the reserve around 100 kilometres east of Calgary.
Ms. Solway eventually secured a loan from the Indian Business Corporation (IBC), an Alberta-based Aboriginal Finance Institution, which is launching, on Wednesday, Canada's first fund focused solely on lending to Indigenous women.
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Across the country, Indigenous people face barriers to accessing small business financing, for reasons ranging from geographical remoteness to the limitations the Indian Act places on mortgaging on-reserve property. Indigenous women face further barriers rooted in sexist ideas about work, according to a 2017 study funded by IBC and the Business Development Bank of Canada (BDC).
IBC's new fund intends to target these barriers, directing $5-million worth of loans toward female entrepreneurs over the next several years, said Rob Rollingson, IBC's general manager. The corporation is hiring an Indigenous woman to oversee the fund and is planning outreach initiatives to find potential clients in communities across Alberta.
"I think there's about 3,000 to 4,000 aboriginal women in Alberta who will require financing over the next several years," Mr. Rollingson said. "Not all of those women will come to IBC. But with $5-million, depending on the the size of the loans, IBC should be able to service 70 to 100 people, which would double our number of female clients."
IBC is part of a network of dozens Aboriginal Finance Institutions set up across the country in the 1980s and 1990s with federal funding and a mandate to make capital available to Indigenous entrepreneurs.
Charging a 12.5-per-cent interest rate on all loans, IBC's financing is by no means cheap. "I can go anywhere and get a bank loan for 7 per cent," said Mr. Rollingson, who justifies IBC's higher rate based on a 5-per-cent default rate with these riskier loans. Unlike traditional lenders, the corporation works with clients to develop business plans and doesn't turn people away because they live on a reservation or because they don't have proper financial statements for their businesses.
"You feel like you're a human rather than a number or a file," said Nicole Robertson, who launched her Calgary-based communications company, Muskwa Productions & Consulting, with a loan from IBC. "Being an Indigenous organization, they have a cultural understanding, so you're not trying to get across your idea to someone who doesn't know the community."
"If you live on-res, you can't say, here's the land for collateral. It's owned by the community. Non-Indigenous people had homesteads passed down generation to generation, so they had assets and equity to go to the bank," Ms. Robertson added.
Despite the shortage of capital directed to Indigenous people, the growth potential for Indigenous businesses, both male- and female-owned, is significant. According to the most recent National Household Survey (NHS) data cited in a 2017 report by the Conference Board of Canada, the estimated number of Indigenous entrepreneurs grew by nearly 10,000 between 2003 and 2011. Furthermore, data collected by the Statistics Canada Business Register in 2015 indicated there were close to 10,000 businesses located on-reserve "versus the less than 3,000 captured by the 2011 NHS," the report notes.
"The majority of aboriginal entrepreneurs rely to some degree on personal savings to start their businesses. And despite the financial services that are available, a minority of aboriginal individuals appears to access loans or credit from banks or government-supported programs," the report notes.
The National Aboriginal Capital Corporations Association estimates that the network of AFIs across the country will need an additional $54-million to cover the projected growth in lending between 2015 and 2020.
There's also a need for smaller loans, particularly for women looking to start part-time businesses. Increasing the availability of micro-loans is one of the key recommendations of the IBC and BDC-funded report.
The new fund is a small effort to deal with a much broader problem, Mr. Rollingson admits, although he hopes it will inspire other AFIs to follow suit with gender-focused lending. For Ms. Solway, even a small shift toward female entrepreneurs is part of a broader process of reconciliation.
"In the tribe I come from, males are very dominant," Ms. Solway said. "But years ago, historically, I was always told by grandparents that women were self-sufficient; they'd chop wood, hook up the team, haul water. That has to come back full circle."