The issue of credit history and immigrants is not new to Canada, yet there is very little information available and no research study obtainable on the specific topic. An extensive literature search uncovered Canadian institutions presentations, which allude to financing problems for immigrants without ever directly addressing the issue of credit history. An Industry Canada literature review revealed two potentially relevant studies, but again neither one addressed the topic specifically: “… this study was not specific to ethnic minorities in Canada, and it does not directly examine potential barriers to financing by these groups. However, it might provide a starting point to identify variables which might be implicated in decisions related to financing decisions.
When discussing language minority entrepreneurs, the Industry Canada paper stated, Regional studies do exist in the literature, but these studies are not specifically focused on financing barriers that are unique to language minority entrepreneurs. As a result, no literature is reviewed in this section. There is a need for further research to empirically confirm the impact of the issue of credit history for newcomers and to delve into the negative outcomes associated with the problem. Websites like Citizenship & Immigration Canada and B.C. Office of Immigration along with Canadian Bankers Association discuss credit/ credit rating, but in terms of defining it, building good credit, and applying for credit. The sites convey neither the importance nor the necessity of credit history to obtain financing to succeed in Canada. Furthermore, present research studies make no mention of the long-term societal consequences.
Immigrant Tailored Financing Programs
Some Canadian and American community-based organizations, financial institutions, and government departments are aware of the issues associated with lack of recognition of credit history and have started to introduce immigrant-specific financing programs to offset the problem.
The Maytree Foundation, a Toronto-based charitable foundation committed to reducing poverty and inequality, offers the Immigrant Employment Loan Program for immigrants who need short-term training in order to be employable in Canada.
The objective of the loan program is to develop a new and permanent stream of financial capital for immigrants and refugees who do not possess a credit history or collateral, but require short term training and upgrading that leads to employment or require an assessment of their previous skills, education and experience that could lead to certification. Similarly, Mennonite Central Committee (MCC) Employment Development, a community economic development organization in Calgary, in conjunction with the Immigrant Access Fund Society, has the
Immigrant Access Fund, which provides immigrants with micro loans to pursue Canadian accreditation in their field of prior study.
Partnerships have formed to address the credit history issue for immigrants. In Vancouver, Van-City Credit Union, together with Mosaic, a non-profit settlement agency, developed the Immigrant Loan Program, which also provides funding for licensing and upgrading. S.U.C.C.E.S.S, a non-profit settlement agency located across British Columbia, along with Western Economic Diversification Canada, Coast Capital and Auto Source Financial.