Western Economic Diversification Canada (WD) and the Saskatoon Credit Union (SCU) have joined forces to create a new $1 million loan program over five years that will provide better access to financing for very small and start-up businesses in the Saskatoon area.

Natural Resources Minister Ralph Goodale, on behalf of Ron J. Duhamel, Secretary of State for Western Economic Diversification and Peter Gerrard, President of the Saskatoon Credit Union, today announced the WD-Saskatoon Credit Union Micro Loan Program which provides loans up to $25,000 to people with good business ideas who are not able to obtain financing from traditional lenders.

"WD is committed to providing access to business programs and services for all Saskatchewan residents," said Minister Goodale. "This program is another option for small businesses in Saskatoon to get the financing they need to create employment opportunities for themselves, create jobs for others and build a stronger, more diverse local and provincial economy."

"The Saskatoon Credit Union Micro Loan program is one more example of our values," said Peter Gerrard, President, Saskatoon Credit Union. "Along with providing quality financial services to the community, we believe in giving back to our community. We always have and we always will."

WD has committed up to $200,000 as a repayable contribution to a loss support contribution, which reduces Saskatoon Credit Union's risk in lending up to $1 million. Should a loan loss occur, the credit union would be able recover a portion of the loss from the reserve fund. The contribution allows SCUs to expand its ability to provide loans to potential entrepreneurs. Both parties share in the risk, as well as the returns, and any remaining monies in the loss support contributio will be returned to WD at the fund's conclusion.

Potential clients for this loan fund include very small businesses and unemployed people who want to start a business. The Saskatoon Credit Union has entered into a partnership with Quint Development Corporation to manage part of the fund and provide entrepreneurial training. This portion is directed to businesses and low-income individuals located in Saskatoon's core area. These loans range up to $10,000. Quint is a non-profit organization that provides training and other services to help people from low-income backgrounds establish their own businesses.

Saskatchewan Post-Secondary Education and Skills Training has provided funding to Quint Development Corporation for self-employment training. This training helps clients gain the skills needed to start their own businesses.

A feature of the program will see WD offer its in-house resources and extensive business network to help applicants fine tune their business proposals and enhance their prospects of securing loan capital. All lending decisions will be made by the SCU.

The Saskatoon Credit Union Micro Loan Program is an example of how the federal government is prioritizing its spending so that it can better serve Canadians by making efficient use of their tax dollars. Funding for this program was provided for in the February 1999 budget and is therefore built into the existing fiscal framework.

For additional information, contact:

Joanne Mysak
Manager, Consultations, Marketing and Communications
Western Economic Diversification Canada
Saskatoon, Saskatchewan
(306) 975-5942

Karen Heise
Vice-President, Human Resources and Community Development
Saskatoon Credit Union
Saskatoon, Saskatchewan
(306) 934-4081