First Nations success in the banking sector

The visionaries behind the creation of the First Nations Bank of Canada (FNBC) could not foresee the rapid growth of the first Aboriginal-owned banking institution. Last year, the FNBC launched a new banking platform that made its operations fully independent of founding partner TD-Canada Trust. The continued success of Aboriginal communities and businesses at investing in their own people and economies has given the FNBC $312 million in assets and 12,000 customer accounts.

Founded in 1996, the FNBC was established to provide banking for Aboriginals with branches serving First Nations communities.

“We started the bank because of the emerging importance of business development in the First Nations world,” said Keith Martell, Chair and CEO of the FNBC. “Many people told the James Bay Cree that First Nations people shouldn’t build an airline or a construction company. We heard the same thing how Aboriginal groups shouldn’t start a bank because the other banks serve our needs just fine.”

But other banks didn’t provide needed financial services for far-flung Aboriginal communities. The lack of service created an opportunity for a banking service with a vested interest in First Nations communities.

A major factor in the FNBC’s success is that it is over 80% owned by Aboriginal shareholders from the First Nations, Métis and Inuit communities across Canada. “Keeping up our success was getting major Aboriginal groups and organizations to recognize that there are alternatives to the regular banks,” said Martell.

What helped bring First Nations communities on board was that, for the first time, a banking institution would be run with the awareness of the realities of the Aboriginal communities, which would also have an ownership stake in the enterprise.

Working with the fastest-growing segment of the population, the FNBC has been expanding its services and offerings tailored to the next generation of Aboriginal entrepreneurs who need capital investment to turn their dreams into reality.

“One of the biggest opportunities for Aboriginal business growth in the future is Aboriginal entrepreneurial growth – not the Nation-owned assets but individual-owned companies,” Martell said. “ There are great opportunities here, both for meeting the needs of the communities themselves and looking beyond the borders of the community.”

And it’s beyond the communities that more and more young Aboriginals are seeking to expand their business opportunities as they buy small businesses from retiring baby boomers.

The new format for community banking centres has been the latest development of the FNBC. And as their partnerships expand, the FNBC will open more branches in First Nations and Inuit communities bringing financial services to them rather than having residents buy a plane ticket in order to open a bank account.

“When an Inuit group from Nunavut bought into the bank in 2007, we had agreed to develop a model for small communities. These are towns with no current banking services,” said Martell on the FNBC’s planned expansion into the northern communities. “We already have community banking centres in Nemaska and in Buffalo River, Saskatchewan. But we’re changing the model to more full-service banking and not just the cheque-cashing service that is primarily offered today.”

Another area of growth for First Nations communities has been the rising demand for on-reserve homeownership.

“Individual homeownership in communities with not a lot of individual income may not be the solution,” said Martell about the housing crisis. “However, there are many individuals who have the resources and the intent to own their own home and we think that is part of the solution. Communities have been demanding that we have a product to meet that need and that’s what we are giving them.”

In order to increase economic autonomy for Aboriginal groups, the growth of the FNBC, alongside the First Nations and Inuit communities it serves, acts as a model for Indigenous groups around the world on their own path of development.