Microfinance group offers RRSPs

Using a solar drier and a peeling-and-grinding machine, Aby Ndao processes grains into maize, millet products, bissap powder, coffee blends and flour mixtures in Kaolack, Senegal. She used two loans from the Union des Institutions Mutualistes Communautaires d’Epargne et de Crédit (U-IMCEC) in 2011 to expand her business, which now has five employees. Photo: Jan Groenewold
Using a solar drier and a peeling-and-grinding machine, Aby Ndao processes grains into maize, millet products, bissap powder, coffee blends and flour mixtures in Kaolack, Senegal. She used two loans from the Union des Institutions Mutualistes Communautaires d’Epargne et de Crédit (U-IMCEC) in 2011 to expand her business, which now has five employees. Photo: Jan Groenewold
By on February 18, 2015

As the March 1 deadline for buying RRSPs for the 2014 tax year quickly approaches, Oikocredit Canada has announced that, for the first time, people in Ontario can invest in microfinance projects in developing countries as a part of their registered retirement savings plans.

“There’s lots of ways for people to invest in global mutual funds that are invested in stock markets in India and China and Russia and North America and South America,” Eugene Ellmen, national director of Oikocredit Canada, said in an interview with the Anglican Journal. “But to actually make an RRSP investment in a way that contributes to international development and helps lift community in the developing world out of poverty has never been possible before in Ontario.”

Oikocredit is a global co-operative, based in the Netherlands and dedicated to helping people escape poverty in developing countries. It has ecumenical support from many churches, and the Anglican Church of Canada’s relief and development arm, the Primate’s World Relief and Development Fund (PWRDF), has been an investor since 1996.

Ellmen noted that residents of British Columbia have been able to invest in this way for some time through “Shared World” fixed term deposits issued by the Vancouver City Savings Credit Union, which works with Triodos Bank, an organization with expertise in the microfinance sector.

The Oikocredit Global Impact GIC is available only through the Mennonite Savings and Credit Union (MSCU), which purchases shares in Oikocredit with the full amount a member invests in the GIC. A minimum deposit of $500 is invested at a variable interest rate, currently 1.3 per cent, for one year. Oiko then uses the funds to promote sustainable development in about 70 countries around the world by providing loans, capital and technical support to microfinance institutions. MSCU receives an annual return on the shares and pays interest.

It’s a model that Ellmen hopes will spread across Canada. “I am talking to other credit unions in Ontario and other credit unions in the west and in the Maritimes as well, and I’d be pleased to start discussions with the chartered banks on it as well,” he said.

Jill Martin, PWRDF’s director of finance and administration, served on the Oikocredit’s international board from 2002 to 2008 and as its president for the last two years. Oikocredit, she said, is “one of the originals,” explaining that it began in 1968 with a call from the World Council of Churches for the creation of a vehicle for churches to invest ethically. Oikocredit Ecumenical Development Co-operative Society was established in 1975. “So it was way ahead of its time,” said Martin. She noted that North American churches have considered socially responsible investment only in the last five to 10 years.

Martin said that churches have typically been more focused on what to screen out of their investments-“sin stocks” and gambling-and it has been more difficult to swing their attention to what positive investments they could make. “This is one way of doing something that makes a huge difference.”

People sometimes question the idea of charging interest on microcredit loans, but Martin said these kinds of loans can be empowering. “It’s different from charity. There’s a place for both,” she said. “Sometimes people absolutely need charity. They cannot survive without it, and there’s a time when they just need a chance to make their lives better.”

Microfinance loans open doors to money, but also to opportunity, training, advice and community support, Martin said. “These are people who wouldn’t even get into a bank in their communities…The repayment is part of the whole package. The interest rate is not preventing them from succeeding; not having access is preventing them from succeeding.” She noted that microfinance has an extremely high repayment rate, “unheard of in the banking industry.”

Personally, Martin said that she found that Oikocredit bonds were “the most incredible gifts,” particularly for teens who have everything and whose minds are opening up to the world around them. “When they get their newsletters from Oikocredit, they suddenly become really interested in something other than materialism,” she said. “It’s…a practical way of enlightening them, and yet you are saving money for them.”

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  • Leigh Anne Williams

    Leigh Anne Williams joined the Anglican Journal in 2008 as a part-time staff writer. She also works as the Canadian correspondent for Publishers Weekly, a New York-based trade magazine for the book publishing. Prior to this, Williams worked as a reporter for the Canadian bureau of TIME Magazine, news editor of Quill & Quire, and a copy editor at The Halifax Herald, The Globe and Mail and The Bay Street Bull.

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