York economics professor works to ease the credit crunch

There are an increasing number of Canadians who – by virtue of having no credit rating, a poor credit rating or limited financial literacy skills – are excluded from meaningful engagement with mainstream financial institutions.   

Brenda Spotton Visano (left), a professor of economics and a member of the Economics, Social & Political Thought and Sociology Graduate Programs, is working with members of the Black Creek Capacity Building Project on the development of a Microcredit Loan Program – a community finance initiative that aims to improve local economic development by removing barriers to financial credit and enabling a variety of employment opportunities. The program will help to provide loans at reasonable interest rates and skill development to individuals in the community via partnerships with financial institutions and business support networks. The Microcredit Loan Program has recently partnered with ACCESS Capital, a member of the Canadian Community Investment Network Cooperative. It is part of a larger research project Spotton Visano is working on that examines financial programs and capacity-building in low income, inner-city communities in Canada.

“The Microcredit Loan Program recognizes that exclusion from financial services poses challenges to economic advancement and it seeks to provide access to credit and support services for residents in the Black Creek community,” said Spotton Visano. “Additionally, it will provide assistance in developing business plans, bookkeeping and money management, computer skills and other skills necessary to employment as an entrepreneur or independent skills tradesperson. All of this is in an effort to create sustainable employment and to maximize the untapped skills and talents of those living in the community.”

Recent trends suggest a growing marginalized and precariously employed unskilled labour force, especially among women, while at the same time an unmet demand for skilled trades and growing opportunities for micro-entrepreneurs. Spotton Visano’s research project seeks ways in which to structure microcredit programs to be an effective avenue by which to transition low income, marginalized communities into the Canadian workforce and financial mainstream.

Many programs operating in urban communities in North America have had very limited success due to their inability to become sustainable or financially viable in the long run. Spotton Visano and fellow researcher Kelly Thomson, a professor in the School of Administrative Studies in York’s Atkinson Faculty of Liberal & Professional Studies, believe that this project provides a valuable opportunity to examine closely the full range of costs and social as well as economic benefits a program like this can provide. It is also a chance to investigate the accessibility of these programs, determining what actual and perceived barriers to such opportunities exist.

Right: Kelly Thomson

“We hope to develop and identify best practices for creating a continuum of integrated services that can support the transition of unskilled, low wage workers into the skilled Canadian labour market as independent contractors, sole proprietors or partners of micro-enterprises,” commented Spotton Visano. “Ideally, at the same time, we will create a model on which other Ontario inner-city communities can build and strengthen their own economic programming and development.”

Spotton Visano teamed up with the Atkinson Faculty’s KNOWLEX Exchange Project – which supports collaboration between the University community and communities outside of York – to develop a variety of communication materials designed to inform the public of the initiative. She’s been working closely with Professor Debra Langan, project coordinator, and KNOWLEX students Akilah Haneef and Neil Britto. They presented their preliminary findings and experiences on the project at the Atkinson Faculty of Liberal & Professional Studies’ Engaging Research & Teaching Celebration on April 14 (see YFile, April 14).

As Langan noted, “The Microcredit Loan Program is an ideal way for students to learn about the dimensions of scholarly research, the needs of the community and how to translate research so that it is accessible to a wide range of audiences. It is also a great way to facilitate the exchange of knowledge between academics like Spotton Visano and communities external to York.”

Spotton Visano teaches in Atkinson’s Department of Economics and School of Public Policy and Administration. She has published extensively on topics related to macrofinance and financial crises. Her latest book, Financial Crises: Socio-economic causes and institutional context (Routledge, 2006), explores the major patterns of change in the evolution of financial crises and analyzes the paradoxical position that crises are at once similar to and different from each other.

For more information on the Microcredit Loan Program, e-mail spotton@yorku.ca