The Caisse d’économie solidaire Desjardins, the McConnell Foundation, the Lucie and André Chagnon Foundation and the Mirella et Lino Saputo Foundation have launched the Garantie solidaire. The Garantie solidaire, which stems from an unprecedented collaboration, is a financial tool designed to support the expansion of Quebec’s social economy and community action. Acting as endorsers, the private foundations offer a $15 million guarantee to allow community organizations, social economy enterprises, cooperatives and non-profit organizations to obtains loans from the Caisse d’économie solidaire Desjardins, a financial cooperative specializing in social economy and solidarity-based finance. With easier access to credit, these organizations will now be able to carry out projects that would not have been possible otherwise and to generate yet more positive impacts for the community, while injecting $15 million in Quebec’s social economy and community action sector.
Offset the market’s shortfalls
Banks see social economy and community action organizations, often wrongly, as presenting a higher risk than private sector businesses. These organizations face difficulties which are inherent to their status or mission, such as the inability to raise investments, to offer the required guarantees, to turn a profit from social or environmental actions or to include public donations in the assessment of their capacity to repay a loan.
A new tool at the heart of the ecosystem
The Garantie solidaire is an additional tool to help complete financing packages in collaboration with actors of solidarity-based finance in Quebec. The Garantie solidaire adds to the available solutions and facilitates the carrying out of community action and social economy development projects.
The Garantie solidaire
To gain access to the Garantie solidaire, organizations will have to demonstrate the economic viability of their project, and their ability to repay the loan. The organizations that take advantage of the Garantie solidaire must pay their endorser a guarantee fee equal to 1% per year of the amount initially guaranteed, based on the length of the guarantee. This fee is in addition to the credit fees related to the loan, which are paid to the Caisse d’économie solidaire. Interested organizations must submit their application to the Caisse d’économie solidaire.
Quebec’s social economy
In Quebec only, the social economy has a broad impact on the economic development. In fact, the social economy represents more than 7,000 businesses, 210,000 jobs and a revenue close to $40 billion, which is more than 10% of Quebec’s gross domestic product (GDP).
Source: Caisse d'économie solidaire