About Community Investing in Canada

The term “community investing” describes using investor capital to provide finance and technical assistance to underserved communities.  The financing may take the form of a loan, a loan guarantee, or an equity investment.

Typically community investment funds or programs are created because a community has undertaken a strategic planning process or a needs assessment that has identified a lack of accessible capital as a barrier to development.

As a result, almost every fund in Canada started independently and has a unique structure and lending methodology.  Some organizations have been formed independently as non profits or cooperatives, some are initiated through government departments, while others are set up as lending, deposit or granting programs of financial institutions or community economic development organizations. Some provide technical assistance in-house while others partner with other organizations to ensure borrowers have the support they need to use the financing effectively. And some have government funding or operating capital while others do not. All community investment vehicles return both social and economic benefits to their investors.

In Canada, community financing is targeted at the following five markets:

Entrepreneurs

There are various types of loans and investments to help entrepreneurs start up or expand  micro businesses, small businesses, worker co-ops, and social enterprises.

Women, recent immigrants, refugees and minorities

There are funds that specialize in providing loans for training, post secondary education and business development to women, recent immigrants, refugees and minorities.

Environment

Environmental funds lend to businesses, organizations, and community development projects that support conservation and that incorporate ecological and/or social values in their operations.

Underserved neighbourhoods and communities

Some funds specialize in financing essential services for socially and economically excluded urban and rural communities. They provide loans or equity support the building of community facilities such as day cares, centres for seniors and special needs groups, employment training centres, recreation centres and others.

Individuals who need housing

There are different ways of making capital available to support affordable housing. Financing can be made available to support housing programs, including housing co-ops, non-profit rental or loans can be made to developers to build rental housing.