Indigenous and Northern Affairs committee  No. It's different.

Indigenous and Northern Affairs committee  They're similar.

Indigenous and Northern Affairs committee  Right.

Indigenous and Northern Affairs committee  As I mentioned, there are three projects that I talked about. One of them was the significant investment of a first nations community in a hydro development project. They own 25% of four hydro dams in northern Ontario. They took part of their claim settlement for the land use and put that in as part of their equity, and they borrowed a couple of hundred million dollars.

Indigenous and Northern Affairs committee  That moves up the continuum.

Indigenous and Northern Affairs committee  You can't look at any part of financing and say that money is capital and it all comes from the same place. AFIs are developmental lenders. They bring small and medium-sized businesses up through that food chain and from non-business people to capable business people with some equity.

Indigenous and Northern Affairs committee  It's one to one.

Indigenous and Northern Affairs committee  No.

Indigenous and Northern Affairs committee  They're very involved. We deal with many first nations all across Canada. About 90% of our loan portfolio is to aboriginal groups and first nations individuals, and we compete regularly with all the big banks whenever we go to an opportunity. They're all there and they're being quite competitive on price and service.

Indigenous and Northern Affairs committee  The AFIs are represented by NACCA and are developmental lenders. As Francine said—and she can speak to it better than I—these are for smaller, developmental loans. Commercial loans are typically what you'd see from existing chartered banks. They need to be on commercial terms and purposes and the ability to repay.

Indigenous and Northern Affairs committee  There are a lot of issues. The Indian Act and the collateral issues there are part of the challenge. Banks like ours and other banks figure out ways to deal with that. Instead of looking at physical security of an asset on reserve, we look for cashflow security. We're really cashflow lenders.

Indigenous and Northern Affairs committee  The largest barrier under the Indian Act is the inability of a financial institution like ours to take security of a physical asset on reserve. Typically, if we were doing a vehicle loan for a grader in a northern non-aboriginal community, for example, we could take a chattel mortgage on that security.

Indigenous and Northern Affairs committee  Briefly, some level of developmental lending is always tough and it's difficult for the private sector. For the same reason that the Atlantic Development Corporation and Western Economic Diversification Canada are government programs, that's effectively what the aboriginal developmental lending really is as well.

Indigenous and Northern Affairs committee  As I mentioned, I think you really have to consider the continuum. You have two points on a continuum of aboriginal economic development here today. NACCA and its members are developmental lenders. They deal with start-ups. They deal with providing not commercial bankable loans but equity loans to people who are in the start-up phase.

Indigenous and Northern Affairs committee  Thank you. Good morning. It's a pleasure to appear before your committee today. As the leader of an aboriginal-owned chartered bank that primarily focuses on Inuit, Métis, and first nations customers across the country, I have significant experience on the topic being discussed today.