Canada’s credit unions have launched a new micro loan program aimed at Gen Yers who are choosing to start their own businesses.
Through the Remarkable Micro-Loan program, 45 credit unions in British Columbia are asking young adults ages 18 to 29 to share their business ideas and goals. Those with the best ideas will be rewarded with a micro loan up to $5,000.
The credit unions will provide financial support and guidance to help recipients to pay back the loan, while also helping them build a solid credit history, according to the $70 billion Central 1 Credit Union in Ontario, which is leading the effort.
Loans are granted based on the merit of the customer’s idea for building community and promoting social change rather than their credit rating or size of their assets.
Designed for young people with little or no credit history, the loan’s interest rate is prime plus 1% and it has a flexible payment schedule. Applicants must be British Columbia residents but are not required to be current credit union members. For the first 24 months of the loan, recipients make payments on the interest portion.
Since the program launched, loans have been distributed to young entrepreneurs that include fashion designers, landscapers, shop owners and food truck operators, according to credit union officials.
One of the loan recipients is Geoff Darling of Darling’s Lawn & Gardening in North Vancouver. He said the micro loan helped to jump start his business and grow it over the past year. He plans to study horticulture at college in the fall.
“The credit union gave me a lot of support through the process, which is totally different from what I’ve experienced at most banks,” Darling said in a statement.
The micro loan program is part of the Be Remarkable campaign, a provincial-wide effort to build the credit union brand across British Columbia. The initiative is using Facebook, YouTube and other online channels to promote the campaign.
A series of videos called Remarkable Stories are posted to promote credit unions and features some of the successful loan recipients and their projects.