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Community loan fund will help entrepreneurs

Steve Pedersen is president of the Southwest Alberta Community Loan Fund.

Microcredit is coming to Fort Macleod.
A new non-profit organization called the Southwest Alberta Community Loan Fund is aiming to help low-income people who can’t scrape up the money they need to get started in business.
The fund anticipates it will have loans from $500 to $5,000 available for between five and 10 low-income entrepreneurs some time later this year.
“The Southwest Alberta Community Loan Fund is all about working with low-income entrepreneurs to build pathways out of poverty through microcredit,” president Steve Pedersen explained.
“Many of us have heard about microcredit internationally and the great impact it can have in third world countries. The microcredit model can also work in our own backyard.”
“Our goal is to be able to launch our programs in the fall of 2011 and to work in the communities of Fort Macleod, Lethbridge, and Cardston,” Pedersen said.
The Southwest Alberta Community Loan Fund grew out of the work of the Southwest Alberta Coalition on Poverty, a grassroots community-based coalition that has been working for 10 years to raise awareness of poverty and its effects, and to help develop strategies to address it.
“The coalition began to look at microcredit as a poverty reduction strategy early in 2010,” said Pedersen, a Cardston public health consultant and Poverty Coalition member.
“We conducted a series of focus groups in the community to see whether low-income persons would find something like this useful and if so, how.”
Response was positive, with the result that the community loan fund was organized as a registered non-profit under the Societies Act of Alberta.
Pedersen is president, with Ronda Reach and Tina Williams representing Fort Macleod on the board.
Pedersen cited the St. John, New Brunswick, Community Loan Fund as an example of how microcredit can work in Canada.
“They report that eight years after initiating operations they have received over 950 loan inquiries and given out close to 150 loans at an average value of $1,250. These loans have helped to end reliance on provincial income assistance, have helped families become self-reliant, have generated over $3,000,000 in new income for their local economy, and have saved the government over $450,000 in social assistance payments.”
“We believe that we will be able to have a similar impact over time in southwest Alberta by working with local low-income entrepreneurs.”
Fort Macleod economic development officer Martin Ebel said the new organization will provide great opportunities for Fort Macleod citizens.
“As far as I’m aware, this is the first time such a program has been proposed for Fort Macleod, and for that matter, southern Alberta south of Calgary,” Ebel said.
“While the impact of such a program might not be as dramatic as in a developing country, this could be very important for Fort Macleod and southern Alberta as it will be a way for small entrepreneurs with no access to credit to get the funds they need to start small businesses and hopefully take steps to becoming financially self-sufficient. It will also allow them to potentially develop a business credit history as they repay the loan . . . that they can then use when applying for larger loans at banks or other financial institutions as their business expands.”
Southwest Alberta Community Loan Fund board member Ronda Reach said the new venture will do more than just provide start-up funding for new businesses.
“In addition to the microcredit loans the community loan fund will offer business development and coaching,” Reach said. “We hope to create a safety net for new entrepreneurs not sure enough to jump though the hoops of the traditional institutions and workforce agencies. This is about lending supports to low income entrepreneurs. We want to help them reach their goals. In turn I feel it will help to expand the base of small businesses and services for the residents of our community.”
The community loan fund’s focus is to raise from $10,000 to $15,000 for initial loan capital. The fund has partnered with a number of local service organizations as well as municipal governments, and is also working in partnership with the University of Lethbridge to develop programs to work with clientele.

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