“We know this investment will spark and inspire other businesses to contribute to economic reconciliation as well.”
The federally backed Indigenous Growth Fund (IGF) has secured C$3 million from Twitter founder Jack Dorsey’s Block Inc. This is the first private investment in the fund.
“By investing in Indigenous investment vehicles, we are putting reconciliation into action.
– Shannin Metatawabin
Managed by the National Association of Indigenous Capital Corporations (ANSAC), the IGF was launched as part of the Government of Canada’s 2019 budget and aims to restore “growth and prosperity” to the Indigenous economy.
The initial $150 million closing of the FMI 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 – which distribute all three from government capital.
Block’s investment is part of its $100 million social impact investment that was announced in 2020. Through this initiative, Block aims to support minority and underserved communities. The company says $10 million has been allocated as an investment in international funds and lenders focused on underserved communities in Block markets outside of the United States (US).
“We all need to work together to contribute to economic reconciliation, and by investing in Indigenous investment vehicles, we are putting reconciliation into action,” said NACCA CEO Shannin Metatawabin. “We know this investment will spark and inspire other businesses to contribute to economic reconciliation as well.”
Metatawabin told betaKit that NACCA is currently working to secure two more similar investments from a foundation and an indigenous institutional investor.
“Then we plan to pause fundraising until existing pledges are largely exhausted,” he added.
The FMI provides loans to Aboriginal entrepreneurs who need capital to start or grow their business through a growing number of Aboriginal Financial Institutions (AFIs) across Canada. AFIs are responsible for distributing FMI loans to Aboriginal businesses.
AFIs are self-governing, Indigenous-controlled, community-based financial organizations that provide loans and trade financing to First Nations, Métis and Inuit entrepreneurs and businesses in all provinces and territories.
With its network of more than 50 financial institutions, NACCA says AFIs have deployed around 50,000 loans worth nearly $3 billion over the past three decades.
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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 in the Nuu-chah-nulth Economic Development Corporation (NEDC), an AFI located on Vancouver Island. Founded by the fourteen Nuu-chah-nulth tribes in 1984, the NEDC claims to be one of the most active members of the AFI network. IGF’s contribution will allow NEDC to provide financing to small businesses, while serving First Nations clients with larger capital needs.
Once the IGF is fully utilized, NACCA said it plans to increase AFI lending by $75 million a year with loans made to about 500 businesses.
Metatawabin also told BetaKit that NACCA expects about 25 to 75 indigenous businesses to benefit from the additional capital IGF provides to AFIs “and hundreds more will follow in the years to come.”