Legwork pays off for First Nations: province's first Aboriginal-owned credit union rooted in Garden River. (Native Business: Special Reports).

It has been seven years since the Union of Ontario Indians first began exploring the possibility of creating the first financial institution in Ontario made up entirely of Aboriginal peoples. But all of their hard work has paid off.

Since opening last November, the Anishinabek Nation Credit Union (ANCU) in Garden River, Ont., just three kilometres northeast of Sault Ste Marie, has loaned out over $1 million, and currently has over 600 members and approximately $1.5 million in assets.

However, to the interim general manager of the credit union, Kenton Eggleston, the financial payoffs pale in comparison to the historical significance of the institution to Aboriginal peoples.

"This is the largest single political grouping of Indians in Ontario," Eggleston says. "It's incredibly significant, particularly significant when you see First Nations peoples trying to reclaim and re-establish their own self-government and their own financial institutions."

"(The credit union) provides the opportunity for people who, quite often in the past and still today, have a lot of trouble acquiring financial services from the existing financial institutions in the province," he adds.

"Here, any First Nations person can receive financial services delivered to them by their own people in a respectful and caring manner. Sometimes, they can't get that elsewhere."

The Anishinabek Nation Credit Union is a financial services institution democratically owned and controlled through the association of its members.

Any First Nations' member or related organization living or working within a 300-kilometre radius of Garden River, and any. First Nations' member or related organization that is a member or is part of the community that is a member of the Union of Ontario Indians is permitted to be part of the credit union.

The idea of the credit union was born in 1994 when the assembly of chiefs of the Union of Ontario Indians began exploring the possibility of creating a financial institution set up and controlled by First Nations to serve the First Nations.

Initially, they looked at creating a chartered bank, but that idea required a substantial investment of hundreds of millions of dollars. So, they decided to look at the possibility of creating a credit union. The start-up cost for the credit union was relatively low, at under $1 million, says Eggleston.

"So right off the bat, we narrowed the choices down to setting up the credit union," Eggleston says. "This idea was particularly appropriate because of its democratic structure. It had a core philosophy, which was consistent with the First Nations approach of being all-inclusive for its members, regardless of the amount of money people have, and also, it would be democratically owned and controlled."

From late 1994 to early 1995, the Union of Ontario Indians examined the public interest in the idea to see if the First Nations would be prepared to do business.

In early 1996, the union decided to conduct a feasibility study and hired a consulting firm to do the work. The preliminary results indicated that the idea was indeed feasible. However, they still needed the province to approve the idea and grant them a charter. That turned out to be a very daunting task, Eggleston says.

"In the last 10 to 15 years, it's been very rare to see credit unions start up. In fact, it's been the reverse. Financial institutions are extremely competitive so you're seeing credit unions merge. You're not seeing new ones starting up. So, because it's very unusual, it took a lot of convincing to get the Province of Ontario to get the union started."

In order to illustrate to the province that the Union of Ontario Indians would be able to sustain a credit union, they had to secure pledges from the First Nations. They also had to find funding for the feasibility studies and planning. Some members of the First Nations put up their own development money, but the union also levered support from Aboriginal Business Canada.

However, the province also had a number of other concerns, including the Indian Act and its effect on lending and security options for the credit union. The first business plan was subsequently rejected.

Fortunately , the province approved the second business plan. However, the province insisted on various amendments to the plan, says Eggleston.

First, the credit union could not do any business until they raised at least $375,000 in start-up capital. Also, the province insisted that other studies be conducted to ensure its viability. Also, the province required the union to form a board of directors and hire an experienced individual to develop the board and to establish policies and procedures.

In early 1999, the union hired Eggleston as their interim general manager and pulled together a board of directors. They spent the next year establishing by laws, policies and procedures.

"It took 18 months to raise the necessary $375,000, but in fact, the union raised over double that amount, over $1 million. The union met all of the province's requirements and subsequently were awarded accreditation by the province on March 29,2000.