‘Winter road season’
As in Alaska, the biggest challenge some credit unions find in serving indigenous populations—known in Canada as First Nations people—has more to do with far-flung geography than lack of member wealth. Some areas are accessible only by plane.
“During winter, the government builds ‘winter roads,’ which enable residents to drive to Winnipeg” and get supplies, says Paula Nelson, general manager of $19.6 million asset (Canadian) Me-Dian Credit Union in Winnipeg, Manitoba. “Travel by winter road is more affordable than by plane. The winter road season depends on the weather—a cold winter extends access by road longer than a warm winter.”
Fortunately, harsh winters rarely impede the services Me-Dian provides. Except for a small branch offering teller services to members who live on the Grand Rapids reserve, most members receive services electronically. Members from other reserves who need more extensive services typically visit the credit union only once a year. More than half of the 3,251 First Nations members reside in metropolitan Winnipeg.
Me-Dian—one of 57 credit unions serving Canada’s Aboriginal population—also is the oldest. It opened in 1978 as Métis Credit Union with a closed bond to serve the Manitoba Métis Federation—a group made up of racially mixed people of French-Scottish and Aboriginal descent.
“The Métis Credit Union changed its name to Me-Dian Credit Union around 1980,” Nelson explains. “Membership would then not only service the Métis, but also First Nations and Intuit people. Recently, the credit union changed its bond to include associate members who are of non-Aboriginal descent.”
Me-Dian offers standard credit union services, including loans. Some financial institutions won’t make loans to members who live on reserves because they have no authority to repossess collateral on sovereign land if the borrower defaults. “We’ve been lending on the reserves for years without major problems,” Nelson says.
One of the biggest problems the credit union faces is serving a population that traditionally doesn’t save, Nelson says. “Encouraging some members to save can be difficult.”
For some Aboriginal people, lack of savings isn’t a problem due to influxes of capital from land-claims settlements, according to a report from Credit Union Central of Canada. In addition, the Aboriginal population is projected to grow to 4.6% of Canada’s overall population by 2026—a 22% increase from the 2006 census and a 63% increase over the 1996 census. During that same period, Aboriginal communities are expected to account for 22% of employment growth.
“These trends represent tremendous opportunities for credit unions to demonstrate the cooperative difference by providing inclusive and much-needed financial services in ways that respect and acknowledge Aboriginal peoples’ aspirations,” Credit Union Central of Canada reports.
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