On November 4th, members of the community, staff, and city officials came together to celebrate the launch of the Causeway Community Finance Fund – a pilot program designed to help people break free of the burdensome cycle of payday lending. As everyone filtered into Causeway’s cafeteria, they were greeted with delicious snacks and coffee prepared by our very own Krackers Katering. They were also given a story:
Meet Anna. Anna is a single mother of two who has a full time job. She tries her best to provide for herself and her two children, but money is tight. When her refrigerator broke, she did not have the money to fix it or buy a new one. None of her friends or her other family members were able to help her out. She had no choice; she has two children to think about. What could she do? What would you do?
This is a common story that many of us, especially those with a limited income, can relate to, whether it’s an appliance breaking, your car needs repairs or you have to take time off work to care for a sick child, sudden expenses are unpredictable and can be extremely crippling. Anna had only one option; she couldn’t be without a fridge for very long and she just couldn’t afford to wait until she had enough money so she turned to payday lending. When she discovered the true cost of payday lending, she found herself taking out even more loans to cover the costs of her initial loans and went deeper and deeper into a “debt spiral”.
Back in 2010, Causeway’s Directorof Social Business and Social Finance, Doug Pawson, began thinking about this problem when he and other members of Causeway’s team startednoticing that many of their clients and employees in the social businesses were in need of loans and some were caught in similar debt spirals associated with payday lending. This is unsurprising, as an FCAC report has recently shown that more and more people are turning to pay day lending operations than ever before. The industry tends to target low income individuals as illustrated by the fact that the vast majority of these payday lending operations are located in low income neighbourhoods. This provided Causeway with the opportunity to help many people by creating an alternative to payday lending – one of the first of its kind in Canada to get people the loans that they need, establish a relationship between clients and mainstream financial institutions, and improve financial literacy. Causeway has developed partnerships with Alterna Savings, Frontline Credit Union and Your Credit Union to create the Causeway Community Finance Fund (CCFF). Rob Paterson, the President and CEO of Alterna Savings spoke about how “this was something that [they] felt strongly about from a community aspect…it was simply a no brainer for [them]” to get involved.
Other speakers for the launch included the Hon. Yasir Naqvi who was tremendously supportive of Causeway taking on the leadership role to try and create a solution to this problem involving mainstream financial institutions. “I have for a long time felt very strongly that our financial services sector has a huge role to play in dealing with the problems around payday loans”, said Yasir to tremendous applause. Ottawa City Counsellors Mathieu Fleury, Catherine McKenney, and Jeff Leiper also shared a few words of encouragement and support for Causeway’s initiative.
At the end of Anna’s story, she was able to get the loan that she needed to fix her fridge and learned how she could save a little money from each paycheque to put towards savings. She is being empowered to “cross the bridge to economic independence” through financial literacy training and a loan with a reasonable rate. The bridge builders at the end of the bridge symbolizes the community coming together to support the CCFF through donations. Through their work and their donations, they are effectively helping to strengthen the bridge which allows us to support more people on their way to economic independence.
**NOTE: If anyone is interested in learning more about the Causeway Community Finance Fund pilot project, please contact our Intake Office:
613-725-3494 ext. 107