Aboriginal Growth Fund |  A first private investor breaks the ice

Aboriginal Growth Fund | A first private investor breaks the ice

Three million, for an investment fund, that may seem trivial. But not when it comes to an indigenous growth fund in Canada, created a year ago with $150 million from federal taxpayers, and which this week welcomed its first private investor, Block, a San Francisco technology company. .

Posted at 6:00 am

Karim Benessaieh

Karim Benessaieh
Press

The enthusiasm is palpable, in any case, in the voice of Jean Vincent, president of the board of directors of the National Association of Aboriginal Financial Companies (ANSAF), which manages this growth fund. At the end of the line, the resident of Wendake’s Huron-Wendat reservation, in suburban Quebec, dreams aloud.


photo provided by Jean Vincent

Jean Vincent, Chairman of the Board of Directors of the National Association of Aboriginal Equity Corporations

This first private investor is something we had in our sights. This fund, we would like to go up to 500 million, it could be even more than that. We want it to be well structured and of institutional quality, so that investors who put money into it see their capital reimbursed with a return.

Jean Vincent, Chairman of the Board of Directors of the National Association of Aboriginal Equity Corporations

The $150 million, now $153 million, from the fund will be redirected to the 50 Aboriginal Financial Institutions (AFIs) established in Canada, including 5 in Quebec. Only one investment has been confirmed so far, $10 million advanced last March to the Nuu-chah-nulth Economic Development Corporation, an AFI located on Vancouver Island.

More numerous, more ambitious

The apparent slowness of the procedures does not worry Mr. Vincent. This trained accountant also chairs two Quebec AFIs, Native Commercial Credit Corporation and Native Savings Corporation of Canada. “We are talking about a limited company, it is still quite complex, with public and private partners. The demand is there, at some point it will explode. And it will go faster and faster once the institutions are qualified, they will advertise. »

The projects are extremely varied and affect almost all sectors of activity of the aboriginal communities: natural resources, tourism, hospitality, construction, convenience stores, service stations, supermarkets, both community and private projects, with “some small businesses that they are related to techno, but I would say that it is not our main sector of activity”, specifies Mr. Vincent.

The problem is that it is very difficult to find funding for Aboriginal projects, which are becoming more numerous and ambitious. That it has taken almost a year to get 3 million from an American company more than proves it. For example, in Canada in 2021, venture capital attracted $14.7 billion in investment across 752 deals, according to research by BDC Capital.

“We have an educational job to do with the financial markets”, Mr. Vincent modestly summarizes.

three fences

He recalls that ANSAF made exemplary use of the $240 million Ottawa provided for its foundation in the late 1980s. “We gave 50,000 loans worth $3 billion. The capital of 240 million still exists, continues to grow. We must tell this story to investors, tame them, we must make ourselves known. »

The obstacles are well known. First of all, there is article 89 of the indian law, which establishes that the property of an “Indian” or of a group constituted on a reservation cannot be seized…nor be mortgaged. Renewing this antiquated law dating back to 1876 is “a political headache,” Vincent sums up.

The remoteness of the indigenous communities, the extreme difficulties of physical access in some cases or the absence of internet make it difficult to obtain banking services, he points out.

Aborigines have their culture, cultural differences that make it happen a little bit differently. This creates a feeling among conventional financial institutions that this is a riskier market.

Jean Vincent, Chairman of the Board of Directors of the National Association of Aboriginal Equity Corporations

Reducing the wealth gap between Aboriginal peoples and the rest of the Canadian population through investment is, however, “an initiative that goes in the direction of reconciliation”, he believes. He estimates the necessary investments at 200 billion “to bring the First Nations up to the level”. The Assembly of First Nations, last April, established that the needs of the 1.7 million aboriginal people in the country were 44,000 million dollars in 10 years only in terms of housing.

The organization also lamented that the 2022 federal budget provided only $11 billion over 6 years for indigenous priorities. The Trudeau government, for its part, estimated its investments at $28 billion.

More information

  • 100 million dollars
    Total amount of the “global social impact fund” established in 2020 by Block, formerly Square, an electronic payments company owned by Twitter founder Jack Dorsey

    Source: BLOCK.XYZ


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