© YU SISTERS MULTIMEDIA INC 2003

The Three-Step Lending Process of the
Aurora Business Project of the YMCA NDG

The following chart shows the three levels of loans, in the order that they are available. Loans over $1000 are only available after the successful repayment of a "Step 1" loan borrowed through a loan circle. After Step 1, borrowers may choose either the collective or individual option (see definition below).

     
   Step    Collective             Individual 
   1          $120 - $1000       X
   2          $120 - $2500       $2501 - $3500
   3          X                            $1000 - $5000

Definitions:

Collective Responsibility:

A loan secured through a lending circle where members of the circle co-sign the contract and are legally co-responsible. Loans are reviewed by the Loan Review Committee of the Aurora Business Project (see Rules of the Circle for more details). The lending capital is provided by the Royal Bank and the interest rate is prime + 5% (2% is returned to the borrower if the loan is repaid successfully and they have participated fully in their circle.

Individual Responsibility:

Circle participation and a letter of recommendation from the circle are required, but the circle is not co-responsible. A joint Evaluation Committee (YMCA NDG and the Montreal Community Loan Association-MCLA) assesses loans. The Lending capital is provided by the MCLA at 8% to 10% interest.

The Aurora Business Project
(Formerly the NDG YMCA Loan Circle Program)

The Aurora Business Project was originally established in the fall of 1993 under the name of the NDG YMCA Loan Circle Program. Its mandate has been to provide economically disadvantaged women with business training, peer support and a financial boost to help them become self-sufficient entrepreneurs. Like similar programs throughout North America, the NDG YMCA's Loan Circle Project was inspired by the Grameen Bank (or Barefoot Bank) of Bangladesh.

In that country, the Grameen Bank developed when it was recognised in 1976 that many women could become successful entrepreneurs if given the proper community and financial support. Since its inception two decades ago, this idea has caught on all over North America. In Montreal, other programs exist, (Les cercles d'emprunt de Montréal, CDEST and Jewish Family Services, just to name a few).

Across the rest of Canada and in the United States over 200 similar programs have been established and several more are being developed each year.

One reason these programs have spread so rapidly is that they have been extraordinarily successful. They offer opportunity to a vast pool of potential entrepreneurs who have been neglected by all other lending programs : Low-income women. And while the major banks have never considered this group a "good risk" for loans, the repayment rate on Loan Circle programs averages at 98%!

The Aurora Business Project is supported by a volunteer Advisory Board composed of local businesspeople and community organisers. The Board meets regularily to oversee the project, co-ordinate fund-raising, and offer advice on Loan Circle requests. Many of the Board members also offer seminars to the trainees in their area of expertise.

At Present we receive funding for the program from the Ministère de la Métropole as well as through ongoing fundraising.