Enter the Pan African Credit Union initiative (PACU), not yet an official Ontario credit union but nearing that milestone steadily. Ivor Christopher, chair of the Steering Committee for the PACU, says the idea came to him five years ago. A member of the Lions Circle Afrikan Canadians Men’s Association at the time, Christopher says during one of their meetings, he expressed his goal to help form a Black credit union.

Another member, David Bedi, approached Christopher with a burning passion for starting the initiative. With the support of the Jamaican Canadian Association, they formed a group and started putting pieces of the puzzle together.

“From talking to others, people had a similar idea. So it was really easy to get people together to work on it. Because what we're doing is we're filling a gap in the community; our community is underserved and unbanked. There are a lot of systemic barriers in the financial institution in regards to the Black community,” says Christopher.

As a starting step, the PACU dished out a community survey that delivered over 1,000 responses from the Black community regarding what products and services they wanted in a financial institution. “It's a good basis to show the banking regulators that we have support from the community,” says Christopher.

Over three to four years, PACU initiated many actions. For example, following the survey, the PACU hosted town halls to bring awareness and let people know what they were doing. They then did a feasibility study based on the results from the community survey and an economic impact study, which showed the impact on the economy of Ontario, the GTA, and Canada.

The PACU established its business plan with the assistance of KPMG, and most recently, they filed their application with the Financial Services Regulatory Authority of Ontario (FSRA) to obtain their credit union license. “The goal is to establish an alternate banking option grounded in the values of co-operative economics, to better serve Black Ontarians,” according to their press release.

This credit union has a great chance of solving what Christopher describes as a “classic complaint,” where Black businesses are visibly without access to capital and have vocalized the lack. “So with us being in the picture now, we will be able to judge and assess people's business plans or their business based on the merit of the portfolio and the business, as opposed to the colour of the skin of the applicant or where they live,” says Christopher.

This shift in the assessment will have a growing impact on younger Black Canadians. “Unless you have got a fat bank account, or a rich uncle, daddy or mommy, you will have to go to the financial institution to get a business loan or a line of credit. Now, that has been proved over the years to be much more difficult for the Black community than any other community,” says Christopher.

Christopher describes it as “doubly worse” for younger Black Canadians because without a track record, the bank needs assets as collateral that they could leverage, says Christopher. “There is a bias against the Black community. So they will attack other measures to mitigate their risk. So they'll need more collateral or whatever they'll need to make you jump through more hoops because they have to mitigate that risk,” says Christopher.

It’s no surprise that bias exists in the financial industry; Christopher was told bluntly by people who work in this sector because they’ve seen it. “Everything also is timing. With the George Floyd [situation] and the Black Lives Matter, people are more open to it now,” says Christopher. When putting this initiative on the table and the “significant impact on the welfare and wellbeing of the Black community,” Christopher says people are more receptive because they’ve witnessed the barriers that come with systemic racism.

Now waiting for the approval of their Ontario credit license, which takes six to eight months, the PACU is launching an awareness campaign where they will be reaching out to various Black community leaders and organizations throughout Ontario. They will also be kick-starting an investment pledge program. “We don't have a license, so we cannot transact in money; we cannot sell shares and receive money for it,” says Christopher.

When they get their conditional approval, they have pledges they can go back to collect for their $50 million investment capital; a starting value essential to pick PACU off the ground. Christopher says pledges have been rolling at a slower than expected pace but he is confident that things will pick up with the launch of an online form on their website to accept pledges.

Besides financial services, at the core of PACU is the need for financial education within the Black communities in Ontario. According to its press release, “PACU will provide financial education on topics such as budgeting, credit usage, credit management, financial investment and wealth-building. The goal is to become the primary financial institution for the African diaspora in Ontario.”

A Black credit union will change the way Black communities in Ontario interact, transact and locate money. To be a part of this growing initiative, visit https://www.pacu.ca/ for a chance to witness and invest in you and your community.