Single mothers on social assistance given access to credit, small business training

Winnipeg, Man.

The program, which helps women who do not have collateral or a credit history gain incremental access to credit, was launched last September by SEED Winnipeg Inc. and Women's World Finance Manitoba Association. The 18-month pilot project is partially funded by the United Way. "The program has proven to be an effective way to assist women on low income to start or expand their own businesses and move to self-sufficiency," says Garry Loewen, general manager of SEED Winnipeg Inc.

Loewen, who is also the employment development director for Mennonite Central Committee (MCC) in Manitoba, says the program's success has helped SEED Winnipeg Ltd. enter into a contract with new partners, the province's Taking Charge program. Under this new partnership 20 single parent women on social assistance will have the opportunity to form two credit circles.

"This is the first and only program of this kind in Manitoba," says program director, Brenda Blom. The concept is based on a model developed by a Toronto group--Calmeadow.

Five credit circles have been formed under the 18-month pilot project. Two more circles will be formed before the United Way funding expires in February, 1997. One circle will be specifically for people from the Latin-speaking community. Each circle consists of four to seven women. Circle members participate in a 12-week training program which provides basic training for owners of small businesses and helps members develop business plans.

Members assess and approve each other's loans before submitting them to a management board for final approval. First-time loans cannot exceed $1,000. Additional loans are issued only when all members are current with their loan payments. The largest loan available is $10,000. Social interaction, strong peer support and monthly meetings are important aspects of the program. "Participants get strong emotional support--that's what so good about this program," says Blom.

In cities where the program is well established about 60 per cent of circle members take out additional loans. Blom expects a similar success rate in Winnipeg. At the end of the first year all loans are current and two loans have been paid off. Within seven months three women had established businesses that were profitable enough to take care of all financial needs.

"That's an extremely good result," says Loewen, adding most small business owners expect their business to become profitable within two to three years.

Gladys Terichow, MCC Manitoba Communications

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