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Guelph has new micro-financing program

Local minister helps establish a micro-loans program for Guelph's poor.
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Retired minister John Buttars spearheaded a new microfinancing program that is helping Guelph's poor.

John Buttars saw what micro-financing was all about, and what it could do for the poor, during a stay in South Africa about 10 years ago. He thought people living in poverty in Guelph could benefit by having access to relatively small, low-interest loans that could give them a better chance at earning a living.

It took a while for the idea to germinate but now it has taken root. Buttars help spearhead the creation of such a program, with the backing of Meridian Credit Union, Circles Guelph Wellington, and Chalmers Community Services Centre. Together, the three organizations act as the legal entities behind a new microfinance program.

Circles, which launched last fall, is a community-based initiative that offers intensive programs that build relationships across economic barriers, matching low-income individuals with middle- and upper-income people, improving economic opportunities in the process.

Chalmers is a local non-profit that provides emergency food, clothing and support to the marginalized and vulnerable of the community. A United Church affiliate, it grew out of the amalgamation of Chalmers United Church and two other Guelph congregations that became Three Willows United.

Buttars, the retired minister of Harcourt Memorial United Church, was part of a Bridges out of Poverty workshop sometime back that, he said, energized him, and convinced him that a microfinance program was neededl here.

Bridges Out of Poverty helps community organizations, social service agencies, and individuals address and reduce poverty.

Buttars has long been connected to an organization called The Townships Project, a Canadian non-profit, started in the late 90s, that helps jumpstart business ventures in South Africa through micro-lending and micro-financing.

Harcourt United contributed funds to The Townships Project, and Buttars made a trip to South Africa with his wife to see what the project was accomplishing in 2005.

“What I saw in this township outside East London, South Africa was incredible poverty,” he said. “But we were taken around to visit some of the clients who received the equivalent of $125 Canadian dollars, and those loans were changing their lives.”

He has a vivid memory of one entrepreneur who used the loan to travel outside the township, buy a pig and have it butchered, then sell the meat for a profit back in the township. The man prospered.

“He was earning a living for himself and transforming his family’s standard of living,” Buttars said.

A minister with an entrepreneurial spirit, Buttars began to take a closer look at poverty at home and to think of ways in which entrepreneurship could help people. More recently, he began working to start a microfinance program here.

For now, low-income participants in Circles Guelph Wellington are eligible for the loans, which are up to $4,000. Qualified people within Circles may find that to meet their goals of self-sufficiency they need extra money. They may need a loan for car repairs so they can get to a job, or for a training course to enhance their skills. One of the first recipients received a loan to purchase a laptop computer.

Applications are filled out in consultation with the coach, and other members of Circle. The paperwork is then taken to Meridian Credit Union, which processes the loans. A $25,000 GIC, the money originally coming from Chalmers, is held as security against the loans.

“People can access a loan, and pay it back with reasonable interest from a financial institution, on terms they can manage,” said Buttars. “It gives them a credit rating or helps to salvage a damaged credit rating.”