Windmill Microlending - Community Bonds

Windmill Microlending ○

Offering Description

Windmill Microlending (previously Immigrant Access Fund) provides low-interest micro-loans to skilled immigrants and refugees who cannot afford the costs of Canadian licensing and retraining. Windmill loans up to $10,000 to enable internationally trained healthcare professionals (60%), scientists, engineers and other skilled immigrants to pay for reaccreditation programs, exams and related costs.  With a 12 year track record, and a 97.5% repayment rate, Windmill loans enable skilled newcomers to escape long-term poverty by allowing them to increase their incomes threefold, on average, from $16,000 to $50,000, as the result of a loan of $7,000. 

Through this offering, Windmill is raising up to $5M in one-, three-, and five-year community bonds, with the goal of doubling the number of Windmill loans originated over the next two years, from 488 to 976. Investors will earn a stable return while helping new Canadians apply their skills, help fill labour shortages, and escape poverty. 

Capital raised figures include amounts raised both on and off platform.

What is Windmill Microlending?

Windmill provides access to credit for immigrants (citizens, permanent residents, and Convention refugees) who:

  1. Wish to return to their pre-immigration careers;
  2. Have a plan that will lead them to employment in their fields but do not have the resources to pay for it;
  3. Cannot access mainstream credit due to unemployment or low "survival job" income, lack of credit history in Canada, and/or lack of assets/collateral; and
  4. Are trustworthy and of good character.

Applicants are required to provide personal references, demonstrate initiative, have a strong program plan in place, and be willing to repay the loan, which may be used only for purposes related to Canadian accreditation, upgrading, and training, including living allowance while completing the program plan.

Why Windmill?

Problem

Immigrants face many barriers when integrating into the Canadian labour market. Lacking the Canadian training or licensing they require to work in their field, many fall into unemployment or low paying “survival” jobs. With low or no income, they struggle to pay for the Canadian exams and/ or training they require. Accessing credit from mainstream financial institutions is difficult due to their lack of credit history in Canada and low income.

Proven Solution: Windmill Micro-Loans

Windmill lifts the financial barrier for immigrants striving to gain their Canadian licensing/training by providing micro loans of up to $10,000 to help them pay for exam fees, tuition, and other expenses. When newcomers gain their Canadian licensing/training, Canadian employers benefit from an expanded pool of skilled workers, and the Canadian economy benefits from increased tax yields and savings in social programs.

Windmill has historically booked a default rate of less than 3%, which has tracked in-line with the national average for non-mortgage debt.

Traction

Since inception in 2005, Windmill has disbursed over $18M through nearly 2,800 loans. In this current fiscal year, Windmill expects to approve ~500 new loans and manage an average of ~1350 ongoing loans. Based on conservative estimates for the need for micro loans (~36% of immigrants encounter financial difficulty in the licensing process), this represents approximately 5.5% of the ~9,000 immigrants who cannot afford their Canadian licensing/training.

Competitive Advantage

Financial institutions do not tend to offer loans to new Canadians with low incomes and no Canadian credit history. Credit that is available to new Canadians with low incomes and no credit history has prohibitively high interest rates.

IAF combines low-interest loans (no interest loans in the case of refugees) with repayment terms that takes the borrower's life situation and learning plan goals into account. IAF is well connected in the immigrant serving community, enabling us to refer our clients to support services, such as professional mentorship, internship, language training, or financial literacy training to help them succeed with their professional goals. This means that our repayment rates are very high despite the high risk nature of the loans. 

IAF is the only national microloan charity serving all Canadians outside Quebec. There are a handful of local immigrant serving agencies that offer microloans to their clients locally, but combined they serve a tiny fraction of the number of clients served by IAF. 

 

Impact Narrative

VISION

Skilled immigrants are equitably integrated into the workforce and contributing their expertise to Canada's economic and social success.

MANDATE

To relieve poverty by providing micro-loans to immigrants in order to assist them in obtaining Canadian licensing or training that will allow them to obtain employment in their specified field.

IAF is Canada’s largest and most impactful microfinance organization providing a hand up for newcomers across the country to enter the Canadian labour market in their field. The three most common occupations and/or sectors of its loan recipients are in Health (60%); Engineering and Science; and Accounting, Finance, or Business.

Impact Metric

Income Outcomes

Over 300% increase in annual income: At intake, our clients earn an average income of $16,000. This average jumps to $50,000 after completion of their learning plans.

450% increase in annual taxes paid: At intake, our clients pay an average of $1,290 in taxes. After completing their learning plans, average taxes paid rises to $5,800.

Employment Outcomes

Skilled employment increases: At intake, 0% of our clients are employed in their field at a level that matches their skills and education. After completing their learning plans, 69% of clients are successful in finding a job commensurate with their qualifications.

Unemployment drops dramatically: At intake, 38% of our clients are unemployed. This number shrinks to 1% after completion of their learning plans.

Underemployment decreases: At intake, 62% of our clients are underemployed, either in their field or in another field. This decreases to 30% after completion of their learning plans.

Societal Benefits

In terms of social return on investment, in our case, the gain to society from recognizing an immigrant’s credentials, our program has been independently determined to have an annual real rate of return of at least 33%, or higher for health professionals, for example, 58% for nurses and over 100% for physicians.

With a 97.5% repayment rate and over $1 million in interest paid by borrowers at prime + 1.5%, the loan capital pool is sustainable and our clients enable us to continue to lend to future clients.

Risks

All private securities listed through online investment platforms and Exempt Market Dealers (EMDs) like SVX, are likely to carry more risk than those available on the public markets. Our goal is to make you aware of those risks before making an investment. For further details on the risks in the private markets, refer to the SVX Risks section. Some of the risks have been identified for investors:  

Liquidity Risk:
This investment is not liquid (functionally). IAF will make every effort to provide investors with liquidity should they request it, but Investors will not be able to easily sell the community bonds in a similar way to cash and ST investments.

Performance and Business Risk:
The business operations and revenues for IAF Canada are dependent on government funding, fundraising from private sources, and on interest revenues.

Interest Rate Risk:
As a fixed rate of return, the interest rate will not be able to respond to any increases in the market interest rate.

Credit Risk:
It is possible that the Issuer may not be able to make interest payments and/or principal repayment.

This type of investment has substantial risk. Investors should make an investment only if you are prepared not to receive any return on your investment and to lose your investment in its entirety.

Management Team

Claudia Hepburn

Claudia Hepburn

Chief Executive Officer

Ms. Hepburn is a Canadian leader in the field of human capital development. Before joining IAF in 2017 as its first CEO, she co-founded and lead The Next 36, a national education organization designed to accelerate the development of young entrepreneurs. Prior to that, she was the Fraser Institute’s first Director of Education Policy and founded Children First: School Choice Trust, a program that gave grants to lower-income families to assist with school tuition. Claudia has been named one of Canada’s Top 25 Women of Influence and is a recipient of the Queen’s Diamond Jubilee Medal. She serves on several boards including Kids & Company, Canada's largest private childcare company, The W. Garfield Weston Foundation, Fraser Institute, and on the C.D. Howe Institute’s Human Capital Council.

Jon Lam

Jon Lam

National Director, Finance & Risk

Jon joined IAF in August of 2017. Prior to joining IAF, Jon had moved from the Board of Boys and Girls Clubs Calgary to a two-year contract as their top finance leader. He was known at BGC Calgary because of his diligent work improving the finance and technical functions. BGC is a large organization that has benefited hugely from the work of Jon and his team. Now, Jon joins IAF to bring the same innovation and process improvement to their finance and loan portfolio. With a goal to grow the organization by 10-fold in the next few years, IAF is excited to have someone with Jon’s skills on board to help the organization manage the financial risks of a large and growing loans portfolio.

Carrie Church

Carrie Church

National Director, Operations

Carrie joined IAF Saskatchewan in March of 2014 as Executive Director. With the amalgamation on April 1, 2015, of three IAF entities into one (Immigrant Access Fund Canada), Carrie took on the role of Director, HR and Operations. Prior to joining IAF, Carrie worked for St. Paul’s Hospital Foundation in Saskatoon for 2 years, first as Executive Assistant to the CEO, Board of Directors, and Foundation Managers, and then as a Major Gifts Officer.

Previously, Carrie was the Manager of Operations for 4 years at Lakeview Church in Saskatoon, supporting the executive team of 1500 adherents and a 20-member staff.

Mary Ellen Armstrong

Mary Ellen Armstrong

National Director, Communications & Marketing

Mary Ellen joined IAF Canada July 2017 as National Director, Communications and Marketing, a new-created position at IAF Canada (IAF). Mary Ellen came to IAF from Trillium Gift of Life Network - Ontario Ministry of Health and Long-term Care (TGLN) where she was the Director of Communications, Marketing, and Public Affairs for 3 years. There, Mary Ellen increased the visibility and recognition of TGLN as a leader and innovator and established Ontario as a recognized international leader in organ and tissue donation and transplant. Before TGLN, Mary Ellen was Manager, Corporate Communications for National Public relations for 3 years, where she developed and implemented mass marketing, digital marketing and promotion, media relations, branding and stakeholder relations towards achievement of a government priority.

$2,450,000.00

Raised Of $5,000,000.00 Goal*

Days Remaining 103
Hours 11
Mins 12
$2,450,000.00
 
Community Bonds Offer. Structure
2% Valuation
5 Years Term
Invest Now

*Capital raised figures include amounts raised both on and off platform. Amounts raised off platform or committed have not been independently verified by SVX.