Alternative Finances

Microlending Bridges Gaps For Recent Immigrants

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Karla Ogaro was a certified pharmacist in the Philippines before emigrating to Canada. Mohammed Aly, also an immigrant to Canada, was a dentist who ran a clinic that served over 2,000 patients in his native city of Cairo, Egypt. Josie Scapa worked as a nurse on two continents before deciding to start a new life as a Canadian citizen.

In many ways their stories are different — Aly was fleeing the Egyptian uprising a few years go, while Ogaro came as part of a federal skilled workers program. But all three, like scores of professionals who immigrate to Canada to start new lives, faced the same problem.

Practicing their professions — highly specialized, certified, professional services that require extensive licensure — is a remarkably expensive undertaking. Immigrants looking to reaccredit their skills in Canada face some rather expensive hurdles on the journey — examinations, interviews, document submission (and translation if necessary) and language testing are the baseline. Specialized fields will have additional requirements, and those applying will occasionally need additional education to get final reaccreditation. It’s a costly process. Scapa faces around $4,000 in costs to become a nurse again. Aly faced about $10,000 in fees to take his final dentistry exam. Ogaro needed $13,000 to complete a program at the University of Toronto.

It was money that none of them had at the time, because they had each just completed a lengthy and expensive immigration process to Canada. Aly spent several years and $60,000 getting into Canada. Ogaro was pregnant with her second child and surviving on the wages of a pharmacy assistant because she was unable to ply her actual trade as a pharmacist. And not only is immigrating expensive, it also creates the situation of being a stranger in a strange land in terms of a new home country’s credit system. With no easily documentable history in the market, it is not easy to get access to a personal loan or even a credit card that might make it possible to enter the process.

Windmill Microlending was founded to help ease that difficulty.

Strangers in a Strange Land 

It’s not that they don’t want to participate in their given professions, Josie Scapa noted — they want that very much. But getting to a point where that is financially possible can be tricky for those with little in their bank accounts and no meaningful access to credit.

“We want to pursue the assessment. It’s just that, we’re not financially capable since we are newcomers,” Scapa said. “We’re trying to save, but there are lots of things we need to pay for first.”

It was a sentiment echoed by Ogaro, who recalled, “We had used up our savings and didn’t know where we could find the money to pay for the U of T program.”

Aly faced a similar roadblock. “This was the darkest time in this journey,” Aly said. “I remember my mother told me, ‘Maybe this is something that’s not meant for you to do.’ I told her maybe God wants me to try harder.”

The losses for immigrants like Aly, Ogaro and Scapo are obvious — but what is perhaps less obvious is that their losses are also Canada’s. According to a 2015 Conference Board of Canada report, the Canadian economy is missing out on as much as $13 billion a year because of unrecognized education and skills of immigrants.

It is a situation that prompted the 2005 founding of Windmill Microlending by a Swedish immigrant to Canada, clinical psychologist Maria Eriksen, who literally stumbled upon the issues in a Calgary hospital where she was working. A large group of the building’s janitors and cleaning staff, as it turned out, were doctors and nurses — all foreign born and all unable to afford the process of certification and licensure in Canada.

A Better, Not-For-Profit Path Forward

Working with a group of friends and family, Eriksen essentially crowdfunding the seed money to create a charitable organization with one focus: making small loans to immigrants so they can get themselves back on track, and into the careers for which they’ve trained. Originally called the Immigrant Access Fund Canada, the program changed its name to Windmill Microlending last August.

“Immigrants bring education, skills and experience that too often go to waste,” Windmill Microlending CEO Claudia Hepburn said.

Windmill offers loans capped at $15,000 with either no interest at all or very low interest for immigrants, which help pay for re accreditation costs. The loan term is flexible, and dependent on every borrower’s specific path for accreditation.

According to its internal figures, Windmill Microlending has helped more than 4,000 skilled immigrants and refugees in the last 14 years and reports a repayment rate of 97.5 percent.

Participants, Hepburn noted, also tend to double or triple their income, on average, by the time their loan is repaid. It is a solution that creates a win for everyone involved, she said.

“We’re not only helping immigrants themselves to be able to support their families and live the kinds of rewarding professional lives and contribute to the Canadian economy, but also we’re helping Canada by having the skills we need to help us look after our own population and fill the jobs that need to be done,” Hepburn said.

Moreover, she said, as a nonprofit, Windmill is best suited to serve the needs of the its community. The organization’s goal isn’t to make money, and it has no incentive to charge fees or add interest to a loan beyond what it needs to offset risk.

The goal going forward for Windmill Microlending is awareness. Most of its customers come in through referrals, and the challenge is expanding on that referral network. There are a lot of customers out there, Hepburn said, who are not moving forward with relicensing simply because they don’t know they have options. And, she noted, even when they know, there is often a trust barrier to overcome as some customers come in assuming it may be a scam.

But when customers make it through the door, what they mostly find is a that small nudge with a relatively small amount of money can make all the difference in the world.

“Our goals and our client goals are completely aligned,” Hepburn said. “We’re successful if our clients repay their loan, succeed with their learning plan and get employed in their field at a much higher rate of income.”

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