The federal government-backed Indigenous Growth Fund (IGF) has secured $3 million CAD from Twitter founder Jack Dorsey’s Block Inc. This represents the first private investment into the fund.
“By investing into Indigenous investment vehicles, we put reconciliation to action.”
– Shannin Metatawabin
Managed by the National Aboriginal Capital Corporations Association (NACCA), the IGF was launched as part of the Government of Canada’s 2019 budget, and is meant to restore “growth and prosperity” for the Indigenous economy.
The IGF’s initial $150 million close last year was led by the federal government as well as the Business Development Bank of Canada, along with commitments from Export Development Canada, and Farm Credit Canada – all three of which distribute government capital.
Block’s investment is part of its $100 million USD social impact investment that was announced in 2020. Through this initiative, Block aims to support minority and underserved communities. The company claims that $10 million has been allocated as an investment in international funds and lenders focused on underserved communities in Block’s markets outside of the United States (US).
“We all need to work together to contribute to economic reconciliation, and by investing into Indigenous investment vehicles, we put reconciliation to action,” said NACCA CEO Shannin Metatawabin. “We know this investment will spark and inspire other companies to also contribute to economic reconciliation.”
Metatawabin told betaKit that NACCA is currently working on securing two more similar investments from a foundation and an Indigenous institutional investor.
“Afterwards, we plan to pause fundraising until existing commitments are largely drawn down,” he added.
The IGF provides loans to Indigenous entrepreneurs who require capital to start or expand their businesses through a growing number of Aboriginal Financial Institutions (AFIs) across Canada. AFIs are responsible for distributing the IGF loans to Indigenous enterprises.
AFIs are autonomous, Indigenous controlled, community-based financial organizations that provide loans and business financing to First Nations, Métis, and Inuit entrepreneurs and businesses in all provinces and territories.
With its network of over 50 financial institutions, NACCA claims that AFIs have deployed around 50,000 loans worth close to $3 billion made over the past three decades.
Since NACCA opened applications for the IGF in November, the organization said it has distributed $10 million to AFIs.
In March, NACCA announced a $10 million investment to the Nuu-chah-nulth Economic Development Corporation (NEDC), an AFI located on Vancouver Island. Founded by the fourteen Nuu-chah-nulth tribes in 1984, NEDC said it is one of the most active members of the AFI network. IGF’s contribution will allow the NEDC to provide financing to small businesses, while also serving First Nation clients with larger capital needs.
Once the IGF is fully utilized, NACCA said it expects to increase AFI lending by $75 million annually with loans provided to approximately 500 businesses.
Metatawabin also told BetaKit that NACCA expects around 25 to 75 Indigenous businesses to benefit from the additional capital that IGF provides to AFIs “with hundreds more to follow in the coming years.”