Starting a business is challenging. Access to capital, financial literacy and unsatisfactory credit are just a few of the key barriers to success for many young entrepreneurs. The access to capital barrier, along with infrastructure constraints and cultural considerations, is particularly pronounced for certain communities, especially Indigenous entrepreneurs.
According to a 2017 report
by the National Aboriginal Economic Development Board, “First Nations and Inuit businesses and entrepreneurs have been unable to access low-interest borrowing at the same rate as non-Indigenous Canadians.” A range of organizations—NACCA, BDC, Public Policy Forum and others—have arrived at this same conclusion. Unfortunately, there is sparse data about the extent of this capital barrier, as most institutions do not collect demographic data about borrowers or credit eligibility.
In October 2020, Futurpreneur began collecting data about the barriers faced by our entrepreneurs in different communities, and the findings related to credit barriers are stark. Within the first three months of collecting data, only 17% of all aspiring entrepreneurs identified “bad credit score” as a barrier to their success; however, 36% of aspiring entrepreneurs who identify as Indigenous identified “bad credit score” as a barrier—more than twice the overall proportion naming credit as a barrier to their success.
This is why, alongside other supports, our Indigenous Entrepreneur Startup Program
offers more inclusive financing criteria for Indigenous entrepreneurs, recognizing and addressing the impact of systemic credit barriers, as well as infrastructure constraints and cultural considerations to support their business success.