What would it take to ensure that every Indigenous woman in Canada has the opportunity to become an entrepreneur? Impakt, a social innovation consulting company, recently embarked on a research project in partnership with the Indian Business Corporation (IBC) and the Business Development Bank of Canada to try to answer this question. While there is no simple solution to what is clearly a complex problem, our initial findings in Alberta suggest that with relatively small measures we can make a big impact on improving opportunities for both new and existing Indigenous women entrepreneurs.
Indigenous women are starting businesses at twice the rate of Canadian women generally. When interviewing Indigenous women entrepreneurs, we consistently heard how rewarding entrepreneurship has been for them. Though it can be a difficult journey, entrepreneurship changes the lives of these women by increasing their financial independence and stability. Indigenous women see entrepreneurship as an opportunity to raise their family’s quality of life and improve their community’s socio-economic circumstances. They are also more likely to repay their loans than men are.
Compared with employment, entrepreneurship offers Indigenous women numerous benefits; for example, entrepreneurs are their own bosses so their work schedule is much more flexible. This makes it easier to balance work and family life — a major concern for women, who often have most of the responsibility for taking care of children.
The challenges Indigenous women face in pursuing entrepreneurship are diverse and complex. The most significant barriers preventing Indigenous women from pursuing entrepreneurship are as follows:
- Inability to qualify for a loan from mainstream financial institutions due to the lack of property to use for collateral, the lack of access to capital for equity and/or the lack of credit
- Inability to work full-time in their business
- Lack of related education
- Lack of confidence
- Lack of access to male-dominated fields such as construction and resource extraction
- Living in rural or remote communities
In the interviews and secondary research that we conducted, lack of financing was the barrier that was mentioned most frequently. This is an issue both for individual entrepreneurs and for certain Aboriginal financial institutions (AFIs), including IBC, where the demand for loans is greater than the capital available to lend. We also frequently heard that current financing initiatives have very few options for microloans. This problem disproportionately affects women because they are more likely to start smaller businesses that do not require large amounts of capital to start or build their businesses.
Another issue that stood out from our interviews and research was the lack of programs designed specifically for women; no AFI in Alberta has a program dedicated to women. Ignoring the unique needs of Indigenous women sometimes means they are excluded from programming that ostensibly is gender-neutral. For example, a training program might be inaccessible to women if it does not offer child care services. We also heard that some women attending such programs are more comfortable and more confident among other women. As well, our research revealed that often Indigenous women in Alberta are unaware of the programs and resources available to them and of the business opportunities in their communities. As a result, Indigenous women miss out on many opportunities.
The need for positive role models in the business world came up frequently in the interviews, and programming that targets women is the best place to showcase these role models. Indigenous women themselves are best equipped to understand the needs of other Indigenous women. With this in mind, creating programming managed by and for Indigenous women, as well as providing more opportunities for women to connect with mentors, are promising ways to address the unique needs of Indigenous women in a culturally appropriate way.
There are programs and organizations dedicated to helping Indigenous people in Alberta pursue entrepreneurship. The existing initiatives can generally be divided into three categories: AFIs, of which Alberta has five; government programs, specifically the federal Aboriginal Business and Entrepreneurship Development program and the Rural Alberta Development Fund program; and nonprofits. Again, these programs do not have programming dedicated to Indigenous women.
Based on our research, we have developed the following specific recommendations, which we believe will make entrepreneurship more accessible to the Indigenous women of Alberta:
- Create a dedicated fund for Indigenous women’s entrepreneurship (including the option of cofinancing and microloans)
- Develop gender-specific programming, managed by and for Indigenous women (for example, provide child care at workshops and training sessions, address topics relevant to Indigenous women)
- Measure and evaluate the successes and impacts of the loans, as well as the gaps that still need to be met; and leverage the latest communications technology to build awareness and facilitate access
In order for more Indigenous women to become entrepreneurs, we need government support for these programs. IBC has launched and will administer Canada’s first Indigenous women’s loan fund. As the loan fund is being administered through an AFI that has experience loaning to Indigenous people, financiers will be more likely to receive a return on their investment and loan loss would be reduced. Approximately $5 million is needed as an initial investment for this loan fund. Based on the current average loan from IBC, $65,000, this would provide around 76 women with loans over the next five years, with additional funds to be made available for microloans. A measurement and evaluation aspect will be incorporated into this fund. Each dollar invested in Indigenous business through an AFI grows the Canadian economy by $3.60.
Entrepreneurship allows Indigenous women to achieve financial independence and stability while also elevating and transforming their communities. Nevertheless, persistent barriers such as the lack of equity, credit, confidence and financial literacy discourage and often prevent Indigenous women from becoming entrepreneurs. Putting women at the centre of the design of all programs would help ensure that the initiative reflects the unique needs of Indigenous women. The establishment of Canada’s first fund that is dedicated to Indigenous women’s entrepreneurship and managed by an Indigenous woman will address the need for financing and it will be a significant step toward ensuring that starting a business is not out of reach for any Indigenous woman.
We believe that ensuring all Indigenous women have the opportunity to become entrepreneurs is a national imperative.
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