Co-operatives in rural Canada got loans and credit in 2007 much more readily than their urban counterparts, a new Statistics Canada survey shows.
Overall, StatsCan’s survey shows the “vast majority” of co-operatives got all that they requested in new or additional loans, lines of credit or credit cards, but about 20 per cent of co-operatives surveyed felt that “trying to obtain financing of any kind was a serious obstacle to the growth of their organization.”
Among all Canadian co-ops surveyed, 35.2 per cent had applied for financing, while 14.2 per cent applied for new or additional loans or credit. Of those, 88.9 per cent got the full amount requested, StatsCan said in a release Wednesday.
Those most likely to have made a request for any type of financing were in the Atlantic provinces (46 per cent), followed by Quebec and Ontario (45.2 and 43.5 per cent). Co-ops in the Prairie provinces were least likely (22.6 per cent) to do so.
Co-operatives in Quebec were most likely to seek new or additional loans or credit (23.2 per cent) while the Prairie co-ops (5.8 per cent) were least likely. The Prairie co-ops, however, were most likely to get the full amount requested (98.2 per cent), followed by Quebec’s at 92.8 per cent. Co-ops’ requests in Atlantic Canada (76.7 per cent) were least often fulfilled as requested.
The proportion of rural co-operatives that applied for financing was “virtually identical” to urban co-operatives, StatsCan said, but 95.2 per cent of rural co-ops across Canada got the full amount requested, compared to just 73.3 per cent of urban co-ops.
Co-operatives that had made a request for financing in the three-year period covered reported the most common reason they sought additional financing was to acquire additional working or operating capital.
The second most common reason additional financing was sought was to purchase additional machinery and equipment, followed by buying additional land and buildings, StatsCan said.
About 61 per cent of co-operatives involved in child care activities applied for financing, the highest proportion of all types, StatsCan said. Those involved in health-related activities were next at 53 per cent, followed by those in marketing (52 per cent).
About 64 per cent of co-operative start-ups applied for financing, more than twice the 28 per cent for “mature” co-operatives, StatsCan reported.
John Anderson, director of government affairs and public policy for the Canadian Co-operative Association, said in a separate release Wednesday he was “pleased” to see the majority of co-ops that ask for external financing get it, but added he was “concerned” that financing remains a barrier for some co-op businesses.
“It is good to see that financial institutions are increasingly recognizing that co-ops are legitimate business enterprises, and deserve to be treated as such,” Anderson said.
“We are hopeful that this trend will continue, and that an even greater percentage of co-ops will have access to financing in the future. This is particularly important at a time of financial crisis, when co-operatives offer a low-cost and effective means of creating jobs and revitalizing the economy of our communities.”
Among co-ops that asked for financing in the three years prior to the survey, 53 per cent said they’d never made a request to the federal government for any kind of financing. Of these, 77 per cent said they weren’t aware of any federal programs under which they’d qualify for financing.
According to the Canadian Co-operative Association, there are about 8,800 co-operatives in Canada, employing more than 150,000 people.
The StatsCan survey, jointly sponsored by the Co-op Secretariat in Agriculture and Agri-Food Canada and Human Resources and Social Development, sampled co-operatives in a wide range of sectors, including agriculture, natural resources and manufacturing, retail, health, economic development, child care and community services, such as arts and recreation. The survey didn’t include housing co-ops or financial co-ops, such as credit unions.