Thank you very much. I'll take over here.
Thank you, Mr. Chair, and committee members. First, I'd like to thank the Special Committee on Cooperatives for inviting the Assiniboine Credit Union to participate in this very important study into the status of cooperatives in Canada and what the Canadian government can do to strengthen the cooperative sector.
My name is Nigel Mohammed, and I am the director of the community financial centre at the Assiniboine Credit Union in Winnipeg, Manitoba. With me today is Mr. Dale Ward, who is actually the corporate secretary of Credit Union Central of Manitoba and is not with the Assiniboine Credit Union. I just want to correct that. But I will be speaking from Assiniboine's perspective as a financial cooperative, whereas Dale is here joining me today and will be able to answer any questions that may be related to a broader Manitoba perspective.
First, let me start by telling you a little bit about the Assiniboine Credit Union. Like most credit unions, we were started by a small group of people who wanted to help themselves. In 1943, 15 electric company employees formed a credit union where they could save their money and, most importantly, get access to loans when they needed them. In those days, there was no safety net when it came to unemployment insurance, social assistance, or medical care.
At the first credit union meeting, members invested $100 in the new cooperative. The first loan underlined the credit union's social mission. A member at that time borrowed only $50 to pay an outstanding medical bill. Over the years, Assiniboine attracted more members and grew through both sound financial performance and a series of amalgamations with other credit unions here in Manitoba. But we never lost sight of our commitment to our members and to our communities. Today we're one of the largest credit unions in Manitoba and the eighth largest credit union outside of Quebec by asset size. Assiniboine holds over $3.2 billion in assets and employs more than 570 people to provide financial services for more than 108,000 members through 23 branches in Winnipeg and 2 additional branches in northern Manitoba.
As a financial cooperative, we are owned by those who use our products and services. Our member-owners elect, from among themselves, representatives to the board of directors. Each member has one vote when it comes to the board elections and voting on important matters put before the membership. As we are a cooperative, profits may be reinvested into the credit union, distributed to members in the form of patronage dividends, and/or shared with the general community. While it's important for us to be profitable to be sustainable over the long term, as a socially responsible cooperative, our core purpose is to provide financial services for the betterment of our members, employees, and communities.
In March of this year, Assiniboine joined the Global Alliance for Banking on Values, or GABV as it's known, which is a membership organization of 19 financial institutions from around the world who share a genuine commitment to build a more sustainable future for underserved people, communities, and the environment. We have in common a business model that measures success by a triple bottom line approach. That is, measuring people, profits, and the planet in our decision-making. We are proud to be one of three Canadian credit unions to be accepted for membership in GABV. The other two Canadian members are Vancity, based in Vancouver, and the Affinity Credit Union in Saskatoon.
Like other Global Alliance for Banking on Values members, and like many credit unions, we stretch to provide access to financial services for people and communities not well served by the mainstream. That includes financing for community projects and business start-ups delivering social, environmental, and economic value to our communities. We know that financing can be the bridge between people who want to do something and having the resources to actually make something happen.
I'd like to give you a few examples of how we at the Assiniboine use our skills and resources as a financial cooperative to make good things happen in our community.
First, we bring financial services to an underserved neighbourhood. In January of this year, Assiniboine opened a branch in the north end of our city. The north end is a lower-income neighbourhood that has seen the closure of 10 bank branches and the rise of 16 financial outlets—for example, payday loans and cheque cashers—since 1996. We are working with community partners in the north end of our city to open accounts for unbanked, as well as underbanked, residents through our new branch, which is at the corner of McGregor and Mountain here in our city.
Another example of how we use our skills is through our asset-building programs.
We are one of the founders of the growing network of asset-building programs in Winnipeg as well as the northern community of Thompson. People living on low income receive money management training from non-profit partners and their saving is supported using our specially designed matched savings account. Savings are matched 3:1 by the United Way as well as by other funders. Since 2000, participants have purchased over $2.4 million in assets to improve their lives.
Another example of how we use our resources is through an Islamic financial product.
Several years ago, we were approached by leaders from within the Islamic community here in the city and asked if we would consider developing products for their community, as there was a lack of acceptable financial services. We worked closely with the community and an advisory board to design a home-financing arrangement that would be acceptable to members of the Islamic faith. We're proud that our Islamic mortgage is the first of its kind in Canada.
We also use our resources to deliver community financing. Through our community financial centre, we provide financing specifically dedicated to non-profits, social enterprises, and cooperatives so they have the resources they need to carry out their social or environmental mission. We also provide microcredit for business start-ups that would otherwise not qualify for conventional financing. We offer loans and mortgages and bridge financing, whether the latter is to bridge grants, pledges, or accounts receivables, as well as letters of credit and construction financing. We often work with community and government partners to reduce barriers to making financing available.
I would like to focus specifically on how our credit union supports the development and success of non-financial cooperatives. Like credit unions, they were formed by people who came together to address a shared concern. Owned and democratically controlled by their members, cooperatives play an important role in Manitoba's economy. Beyond simply creating jobs, they collectively address important social and environmental issues and ensure affordable access to essential goods and services in many sectors. Many serve the needs of specific, economically marginalized groups, such as aboriginal people, immigrants, as well as youth. In 2007, there were over 260 non-financial cooperatives in Manitoba. Of these, 70% were providing housing, daycare, and other important services.
Recognizing the important contributions that these cooperatives make to the local economy and to our communities, Assiniboine looks for opportunities to support their success.
I'm going to quickly cover some of the barriers to financing cooperative development that we've observed at the Assiniboine Credit Union, as well as summarize and conclude by giving specific examples and suggestions of how we think the Government of Canada can support cooperative development.
While Assiniboine supports cooperatives in a variety of ways, I would like to share our experiences when it comes to financing and suggest ways that the government can help to strengthen the sector and facilitate access to credit. Recognizing that there is a wide range of cooperatives, including those that are well established, such as Red River Co-op here in Manitoba, I would like to focus on financing smaller, early-stage co-ops, including those at the start-up phase.
The role of any lender is to assess the risk associated with a financing request, taking into account the strength of the cooperative's management and governance, the capacity to repay, as well as the adequacy of collateral security. In our experience, there are two significant barriers we've observed to financing small and early-stage cooperatives—first their internal capacity, and second their lack of assets for security.
In terms of internal capacity, as in any organization, strong management is vital to the overall success of cooperatives. Having the right skills and systems in place, whether it's financial, marketing, human resources, or inventory management skills, is essential to a cooperative's long-term viability. It gives us confidence, as lenders, to know that the cooperative's ability to manage and repay the debt is viable and tested through some of these criteria. However, we find that many small and start-up cooperatives lack these technical skills.
The Government of Canada could address this barrier by providing capacity-building grants or other support for cooperatives to acquire the technical skills or to establish the management systems necessary to be successful in achieving their social, economic, and environmental mission.
The second barrier we see to cooperatives accessing financing is their lack of assets to provide as collateral. It is difficult for the Assiniboine to provide financing when there are no assets to pledge as collateral. For example, many non-profit co-ops, such as day care centres, are limited in their ability to secure financing because they do not have adequate assets on their balance sheets that would be deemed acceptable for security purposes.
In the absence of these tangible assets, such as real estate, and with their break-even budgets, which are often necessary and are dictated by the funding agreements—