Credit unions have played a significant role in the development of SRI. The State of the Nation report suggests that “impact investing is a natural fit for credit unions, whose principles of social responsibility, financial inclusion and community commitment are reflected in their missions, strategies and product offerings.” The Responsible Investment Association (RIA) estimates that credit unions manage $698.2 million in impact investing assets, or 17% of the Canadian total. Credit unions’ deposit assets and operational revenues are used to invest in a wide range of impact investment opportunities, including international microfinance programs, microloans for newcomers to Canada, finance for affordable housing initiatives and debt-financing for non-profit organizations and community projects that may not qualify for financing at other financial institutions.
BOX 2.3: Examples of Impact Investment at Credit Unions
Credit unions and caisses populaires across Canada are actively engaged in impact investment. Examples are highlighted below to demonstrate the deep history (e.g., Desjardins) and breadth (e.g., Vancity) of this commitment, as well as the role that credit unions are playing in supporting innovative impact investment models (e.g., Conexus, Assiniboine Credit Union, Libro Credit Union, OMISTA Credit Union and Consolidated Credit Union and Affinity):
• Desjardins’ caisses populaires provide community organizations, social enterprises with access to loans, equity financing, and variety of other financing products for development capital.
• Vancity Credit Union tracks its commercial loan portfolio and investment portfolio for impact. It is estimated that approximately 44% of the credit union’s new loans are made to community impact businesses or sectors.
• Conexus invests in Canada’s first Social Impact Bond: In 2014, Conexus Credit Union invested $500,000 in the first social impact bond (SIB) in Canada. The SIB finances a program for single mothers with young children and who are at risk of needing Child and Family Services, with affordable housing and support.
• Assiniboine Credit Union, Libro Credit Union, OMISTA Credit Union and Consolidated Credit Union have partnered with local community organizations in their area to help new Canadians gain recognition for their credentials obtained in their home countries. As of March 2015, these credit unions had made more than 330 government-backed loans to skilled new Canadians who require financing to pursue certification or training to work in their trades or professions in Canada.
• Affinity Credit Union launched the Business for Good Social Venture Challenge, a crowdfunding competition between non-profit and charitable organizations. Members of the credit union voted via the crowdfunding platform for the social enterprise of their preference to receive the $50,000 prize money.
CCUA (2013) Social Finance and Credit Unions System Brief
FSG (2014) Banking on Shared Value