The National Aboriginal Capital Corporations Association (NACCA) has launched the Indigenous Growth Fund, to support First Nations, Inuit, and Métis entrepreneurs across Canada. The organization will receive a $3.1 million investment from the federal government’s Investment Readiness Program (IRP).
NACCA said the key barrier to the creation and expansion of Indigenous businesses is access to capital.
Last week, the government announced the first funding recipients that will help implement the IRP, an initiative aimed to help social purpose organizations become investment ready. The NACCA, representing over 50 Aboriginal financial institutions, was one of the organizations named as a Readiness Support Partners, tasked with making funding available to support diverse organizations.
“Business development is critical to the well-being of any community, including Indigenous communities,” said Shannin Metatawabin, CEO of NACCA. “Despite tremendous odds and distinct barriers, Indigenous businesses create jobs and opportunities in our communities right across Canada.”
The government investments will be used by NACCA to provide for its network of Aboriginal Financial Institutions (AFIs), so they can support businesses, including community-based social enterprises. The new Indigenous Growth Fund also received $100 million from the federal government in Budget 2019.
NACCA is a membership-driven national association that supports an AFI network, offering funding to First Nations, Métis, and Inuit businesses. The organization said the number of Indigenous businesses is still relatively small compared to the size of the population, and that few Indigenous enterprises grow close to the sizes that the average Canadian company does. It said the key barrier to the creation and expansion of Indigenous businesses is access to capital.
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Over the last three decades, 45,000 loans were made by AFIs amounting to $2.5 billion, according to NACCA. Each year, more than $100 million in new loans are made to Indigenous businesses and 500 startups and 750 existing businesses receive funding through these institutions. According to a 2016 report from the Conference Board of Canada, the potential market for AFIs is over 62,000 Indigenous businesses, employing 124,000 Indigenous people.
The Face of Leadership tech report, published at the end of 2018, found a “negligible amount of Indigenous people in corporate leadership roles” across the province of British Columbia. In the report, there were zero individuals who identified as Indigenous found on boards or in executive roles among the companies surveyed.
The Indigenous Growth Fund looks to address this issue by raising and injecting new capital that AFIs can use to provide more loans to the growing number of Indigenous startups and existing small businesses.
“Indigenous economic development is the key to reconciliation,” the NACCA wrote on its website. “NACCA, through the network of Aboriginal Financial Institutions, is a logical vehicle to deliver economic development programs and funds to the Indigenous Peoples from coast to coast to coast.”
See a full list of NACCA’s AFIs, slated to be recipients of the Indigenous Growth Fund, here.
Image courtesy National Aboriginal Capital Corporations Association via Facebook