Participation of KRG, Makivik seen as critical to success of new venture
Credit unions plan to push out CIBC
By 2009, Nunavik' new credit unions plan to lure more than 3,500 accounts away from the Canadian Imperial Bank of Commerce – the only bank which operates a branch in Nunavik.
The region' co-operative network, Fédération des cooperatives du Nouveau-Québec, is working with Quebec's powerful Desjardins credit union, the sixth largest bank in Canada, to open branches of the Nunavik Financial Services Centre in every Nunavik community.
The first two will open this November.
A July, 2007 business plan describes how Nunavik Financial Services will attract customers away from the CIBC by providing clients with a full range of banking services in Inuttitut, English and French in their own communities.
The CIBC currently carries 98 per cent of the region' business and institutional accounts and more than $100 million in assets.
To reach their goal of becoming Nunavik' top banking institution, the Nunavik Financial Services Centre will have to have the support – and business – of the region's major businesses and organizations.
At present, there are only 83 Desjardins credit card holders in Nunavik, out of a possible 6,000 accounts.
And the 121 private business and 42 organizations are serviced almost exclusively by the CIBC.
"The participation and influence of the KRG and Makivik Corp. will be critical in fostering the participation of other institutions," says the business plan for Nunavik Financial Services.
The new Nunavik Financial Services also needs about $2 million in cash and in-kind contributions for its start-up and first two years of operation.
In August, the Kativik Local Development Centre agreed to help set up the first credit union branches in Puvirnituq, Akulivik, Kangiqsualujjuaq and Salluit.
And, at the Kativik Regional Government council meeting earlier this month, councillors approved a contribution of $237,667 towards a $459,877 project to train staff.
To kick-start the credit union and create a pot of money to invest, the FCNQ also wants to establish a $21 million development fund. The FCNQ is looking for $16 million from the KRG, Makivik, Quebec and the federal government.
At its recent KRG meeting in Kuujjuaq, the majority of regional councillors approved a resolution supporting the creation of this fund "under certain conditions and subject to the participation of other partners to the fund."
Although he voted in favour of the resolution, Lucassie Inukpuk, Kuujjuaraapik's regional councillor and mayor, said venture seemed "little bit risky."
Desjardins had a credit union in Puvirnituq until the 1980s. At that time, there was difficulty in controlling the granting and collection of loans: communications were limited to radio-phone and sporadic and expensive air service.
The credit union wanted to make loans available so people could buy small but affordable houses. Two houses built were in Purvinituq with this financing, for Taamusi Tulugak and Johnny Pov.
But this loan program fell apart when the Department of Indian and Northern Affairs instituted its almost-for-free rental housing program and the credit union folded.
The new Nunavik credit union network will rely on high-speed internet service found in every community in the region.
The credit union branches, located in the community co-op store, will feature bilingual agents, computers, a fax and a scanner to open and manage accounts. Agents will be able to issue a Desjardins bank card, explain services and provide hands-on assistance to clients.
Nunavimmiut will be able to receive money from any source through direct deposits to their accounts. And they would be able to make cash transfers, pay bills, and more.