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Where Credit's Due Photography by Chloë Ellingson

Where Credit's Due

Newcomers to Canada are often shut out of their industries. In Montreal, a community approach to financing might be the fix.

A young Senegalese man carefully manipulates sugar paste into a rose, pausing to show the instructor his progress. After a quick inspection, she nods her approval and the man continues. He is surrounded by several other intricately completed roses and a long row of colourful wedding cakes, all decorated with similar flowers. No glitter, no shine. Nothing to suggest that they are fake. The swirly petals look like the real thing, but they are as edible as the cake itself.

“I have students from all over the world who come to me to learn how to make French pastries,” says his teacher, Marie Émilie Sambou. “What would take them one year to learn in France, I teach them in three months.” She also shows them how to bake cakes, viennoiseries and fondant decorations at Le goût du palais chez Mimi, her certified French pastry school in the Côte-des-Neiges neighbourhood of Montreal. 

Although this is her second career, Sambou is an expert in her field. She came to Canada with her family two decades ago. Back in Senegal, she was a fashion designer who created wedding dresses and gowns. She also taught young students how to make clothing. 

When Sambou’s family arrived in Canada, her husband was a military medic planning to complete his doctorate in public health. Sambou worked in the fashion industry for a short while, but there were new challenges she hadn’t dealt with in Senegal. She was accustomed to Afrocentric styles, but in Montreal the styles were more Eurocentric. She also learned that Canada’s reliance on cheaper overseas clothing manufacturers would make her career in the garment industry precarious. 

When Sambou’s husband died unexpectedly just a few years later, she decided to stay in Canada to build a better future for herself and her seven children. It was a difficult time in her life. She was recovering from the trauma of losing her husband, but she knew she needed to make a living. Eventually, she came up with the idea to blend the art of cake making with elements of her previous profession, which required similar dexterity. Sambou was determined to learn French pastry and start a business, but she didn’t know where to start, who to turn to, and most importantly, how to finance her idea. 

When immigrants arrive in Canada, it’s often for the prospect of a better life for themselves and their families. The truth is, many of them struggle to build that life here. Newcomers with experience and education from other countries must often graduate from a Canadian post-secondary institution in order to access certain professions. Once they have their Canadian education, then they can get their Canadian work experience. 

Yet for some, especially those with family members to support, the idea of going back to school to start over can feel impossible. Immigrants are often forced to let their career dreams die, pivot to other interests, or reinvent themselves. The reinvention process can bring a whole new set of hurdles, particularly financial ones. People like Sambou who need financing to start a business or to pay for professional training often can’t go to traditional financial institutions because they don’t have an established credit history. In these instances, they need someone to give them a chance when traditional banks won’t. 

For more than thirty years, a little-known nonprofit in Montreal has been doing just that. Microcredit Montréal offers loans to immigrant entrepreneurs and internationally trained professionals in an effort to make access to credit more fair and equitable. The organization helps immigrants achieve their Canadian dreams—and it does so, at least in part, with money from Montrealers who are looking to invest for social good rather than personal gain. 

In the 1990s, Montreal was economically depressed. The city was navigating political uncertainty and deindustrialization. Local community organizations representing unemployed youth, immigrants, women and single parents wanted to create a way to provide loans to those who couldn’t get them from banks. Organizers were inspired by the “microlending movement,” which had started in India in the 1970s and was enjoying a resurgence in the US at the time. 

Typically, microlenders give funds to entrepreneurs who cannot get financing from major financial institutions. Microlenders turn to the community of citizens, small businesses, religious groups and nonprofit organizations, asking them to invest or donate small amounts of money. Most microlenders operate to better the community, rather than to turn a profit.

Believing a similar model could work in Montreal, community groups established Microcredit Montréal—one of Canada’s first microlenders—in 1990. Initially, the organization’s main funders were church groups and local feminist activists. Now, an average of forty “social impact investors” and donors give to the cause each year. For the most part, these contributors aren’t wealthy philanthropists, but regular people giving what they can—on average, about $2,000—to help others build new lives in Montreal. 

“In the beginning, we did a lot of conferences to help rally people around this idea of the community lending to the community,” says Indu Krishnamurthy, Microcredit Montréal’s executive director. She says Montrealers were unfamiliar with the concept of microlending, but once volunteers explained its significance to underserved communities, more organizations and individuals wanted to get involved.

When Krishnamurthy immigrated to Canada from the UK two decades ago, she was in the process of becoming an accountant and held a degree in mathematics. After she learned she would need a commerce degree to continue working in her field in Canada, she decided pursuing licensing wasn’t worth it. Instead, she studied French and worked as a bookkeeper for a community organization, and later at the Business Development Bank of Canada. Krishnamurthy started with Microcredit Montréal as a volunteer and is now the third executive director in its thirty-one-year history (all of her predecessors were immigrants, too).

While Microcredit Montréal doesn’t exclusively focus on immigrants, most of its clients happen to be new Canadians who hear about the fund through word of mouth, immigration agencies or the internet. The organization also helps Canadian-born individuals with low credit scores, no assets, no guarantor, or who have declared bankruptcy. Microcredit Montréal’s loans range between $500 and $20,000. The average amount loaned to entrepreneurs is about $7,000, with variable interest rates (between 4 and 8.5 percent) depending on the risk of the project. Borrowers are given twelve to thirty-six months to repay the amount in full, and 93 percent of them eventually do.

Not everyone who seeks a loan with Microcredit Montréal receives one. As with a bank, entrepreneurs need to prove themselves by submitting a solid business and repayment plan. The difference is that microlenders don’t automatically hold an applicant’s credit history (or lack of credit history) against them. A bank will refuse a loan if the applicant has bad credit, even if their business plan is excellent. Microlenders don’t do that—they seek to educate and help people, and if possible, give them financial support.

Krishnamurthy believes a rigorous approval process is in the entrepreneurs’ best interests. “We want to make sure that the project helps the person rather than brings them further into poverty,” she says. “To do otherwise would go against our mission of fighting poverty and exclusion.” Microcredit Montréal will provide feedback if an entrepreneur’s business plan has potential but needs work. If the applicant is willing to tweak their plan accordingly, the organization will be more inclined to lend. 

In three decades, Microcredit Montréal has granted $5.8 million in loans to over 9,600 entrepreneurs, who in turn created about three thousand jobs. These loans launched small businesses that contributed $19 million to the city’s economy, and 65 percent of those businesses are still in operation after five years. Local success stories include Imprimerie AJM, a print shop started by Rosalba Rincon from Colombia, and Les Délices Sirar, a Mediterranean restaurant started by Sirar Charba from Syria. 

After ten years in operation, Microcredit Montréal joined forces with other microlenders in Quebec to form MicroEntreprendre, a network of sixteen microlending organizations. Each organization accepts investments and donations from its respective region and distributes microloans within that same community. Five years later, the Quebec government caught wind of the work being done across the province and began supporting microlenders as part of its economic development strategy. 

Now, most of Microcredit Montréal’s activities are supported by government grants, which change in size depending on the priorities of those in power. In 2020, 83 percent of the organization’s $950,000 budget came from government grants, 14 percent from donations, and 3 percent from other revenue streams. In previous years, a much larger proportion of that budget came from private donors. When government funding is low, volunteers tend to do more heavy lifting and the organization becomes more reliant on community members. Moving forward, Microcredit Montréal is hoping to attract more donors and investors, which would move the group closer to its roots.

Microlending isn’t just about giving out loans, but also showing people from marginalized communities how to improve their business plans and manage money. Microcredit Montréal offers entrepreneurs coaching and workshops, teaches them about business registration, shows them how to abide by laws, and helps them get the required permits and take other necessary steps. 

When Dieynaba Samb first came to Canada from Senegal, she worked at a large, busy hairdresser in Montreal. After a number of years, she quit her job to take care of her ailing mother. She eventually decided she’d like to open a salon of her own. The adult children of an elderly couple who lived in Samb’s neighbourhood of Hochelaga-Maisonneuve were selling the business their parents had owned for forty years. It was just a three-minute drive from Samb’s house and she fell in love with the space. She decided to invest all of her savings into the salon. 

It wasn’t quite perfect, though. The salon wasn’t set up to style the hair of people of African descent. The colours were also off, the sinks were too small, and there was no staff room or office. Samb did much of the work herself, but eventually she hired someone to help her with carpentry and plumbing. “I went to all of the major banks for a loan, but they all refused because I didn’t have a job at the time,” she says. She started second-guessing whether buying the business was the right choice. Then some of her former clients directed her toward Microcredit Montréal. The organization listened to her story, gave her a $6,000 loan, helped her write a business plan and set her up with a free management course. “They believed in me so much,” Samb says. “They have been a godsend.” 

Samb opened her salon, Nabou Beauty, in 2018. When we spoke in June 2021, the space was full of women who were excited to get their hair done for the summer, upcoming weddings and special occasions as Covid-19 restrictions were lifting. (Microcredit Montréal froze Samb’s interest payments during the lockdowns, which she says she’s grateful for.) Samb is now back to working from 10 AM until the wee hours of the morning while her husband takes care of their children at home. She’s so busy that she has to turn away clients. She has four employees and is training two of them to open a second location on Montreal’s South Shore. Eventually, she hopes to expand to Quebec City and get her two daughters involved in the family business.

Sambou’s story is similar. When she learned about Microcredit Montréal through a women’s entrepreneurship organization, she applied, got the loan and never looked back. She’s since repaid the loan in full. Before the pandemic, she was teaching French pastry making to over a dozen students at a time. Stories like Samb’s and Sambou’s show that microloans don’t only launch the initial businesses that get proposed—the owners often help other immigrants learn to run businesses of their own.

Microlending doesn’t guarantee success for everyone, but it’s an open door for people who need funding when all other doors are shut. Alexandre Meza was an architect when he arrived in Canada from Brazil with his family ten years ago. Back in Sao Paulo, he had his own office and worked on many large projects. When he landed in Canada, he intended to keep practising in Montreal. Meza was one of the first people to go through Microcredit Montréal’s foreign-trained professionals program, which offers small loans to professional immigrants to upgrade their skills, join professional orders and complete exams. 

Of the forty thousand to fifty thousand immigrants who arrive in Quebec annually, about 10 percent apply for professional licensing. Roughly 10 percent of those applicants abandon the process, either because it’s difficult for them to balance school with raising a family, or they choose to make a living doing something else, or they don’t have the funds to complete the process. Microcredit Montréal aims to help those who might quit for financial reasons, but there are limitations to who it will lend to. For instance, someone doing a full-time master’s degree who is eligible for provincial funding wouldn’t qualify, but someone working part-time who needs to complete a continuing education course in web programming would. 

Microcredit Montréal is aware of the risks of lending to foreign-trained professionals: licensing exams can cost thousands of dollars and they tend to be difficult to pass. The organization tries to help applicants understand the barriers to continuing in their fields in Canada, and makes it clear that they’ll need to repay their loans either way. “For us, it is hit or miss,” Krishnamurthy says. “We tell them that it’s a lot of money for one exam, and there are good chances that you don’t pass, so what is your plan B?” 

Though Microcredit Montréal can’t help everyone, Krishnamurthy has seen how small loans can make a difference. “Professionals would come to us with low incomes below the poverty line, but within three years they were working in their fields, and their incomes tripled or quadrupled,” she says. In March 2021, the organization received funding from the federal government to expand this program in Quebec. Now, foreign-trained professionals can borrow up to $15,000.

For Meza, the process ended up being too much to juggle while caring for his family. He hasn’t completed the program, but despite the setbacks, he says has no complaints. Meza repaid the loan in full and is now a senior architectural technician for a mid-size firm in downtown Montreal (the relationship between an architectural technician and an architect is similar to the one between a paralegal and a lawyer). “Even if I didn’t become a licensed architect in Canada, I learned a lot from the process of how the architecture profession works here, and I’m happy where I am now,” he says.

Despite many success stories, microlending remains a relatively fringe concept in Canada. Krishnamurthy says people are unaware of its existence, or if they have heard of it, they tend to think of it as a financing method mostly used in India and Bangladesh. That’s despite the fact that other microlending organizations exist outside of Quebec. Windmill Microlending, for example, lends to immigrants and refugees in cities like Calgary and Toronto. There are several microlending organizations in BC, one in Winnipeg, and one in Saint John. Nonetheless, the practice hasn’t caught on, and it’s not clear why. Maybe it’s because people normally think of banks and credit unions as the only legitimate outlets for funding. 

As such, Krishnamurthy says one of Microcredit Montréal’s biggest challenges is letting entrepreneurs in need know that organizations like theirs exist. She’s not worried about the survival of the fund, but she feels they are not lending enough money, which is why she hopes more people will seek them out. She says she would like to see an increase in loan requests post-pandemic.

For Krishnamurthy, the practice of microlending has never been defined by scale. “Our vision of success is about valuing people. We recognize that not everybody wants to become a multimillion-dollar business,” she says. “For example, Marie Émilie Sambou takes pride in not just teaching, but now her children look at her as both a proud mother and a successful entrepreneur. She’s also well viewed in the Senegalese community. That is success to us.”

When I meet Sambou in the spring, she can only teach a few students at a time due to pandemic restrictions. Still, she’s grateful to be teaching. As she gives me a tour of the training areas, preparation tables, large oven and several fridges, she pauses to kindly give instructions to the students while they clean up their stations before they leave for the day. She takes me across the hall to a space I originally thought belonged to another tenant. It’s an additional unit she subleases for special events like marriages and private parties. As she shows me around, I hear the excitement in her voice: “Soon,” she tells me with a big smile, “the weddings will start again.”

Phil Roberts is a writer in Montreal who covers cities, architecture, design and culture. He’s been published in Design Exchange magazine, C3 and Next City. He holds a bachelor’s degree from the University of Toronto, where he majored in architectural design.

This story was supported by Journalists for Human Rights and the Solutions Journalism Network and made possible by funding from the McConnell Foundation.