MICROCAPITAL BRIEF: Vancity Loans $740k to Brighter Investment for Education Microfinance in Ghana

Vancouver City Savings Credit Union (Vancity) of Canada is lending CAD 1 million (USD 740,000) to Brighter Investment, a Canadian lender to university students in Ghana. Of the total, half of the funds were disbursed to Brighter Investment in April, and the remainder is scheduled to be distributed in September. Brighter Investment is using the cash to expand its funding of students, who agree that upon graduation they will repay their loans based on a “percentage of their income…typically 25 percent [of their income] for six years.” The terms of the loans from Vancity to Brighter Investment remain confidential.

Brighter Investment Investor Relations Manager Belinda Kuglenu argues that although pandemic-related school closures, rising unemployment rates and falling wages may result in delayed distributions to investors, the outlook for “long-term returns remain strong.” Based on the “worst case scenario” of schools remaining closed for prolonged periods, the economy failing to recover in the medium-term and an unemployment rate of 20 percent, she predicted investors in Brighter Investment would still earn a four- to seven-percent return.

Thijs Mathot, the Founder & CEO of Brighter Investment, wrote, “We are very proud that, despite the uncertainty that the global COVID-19 pandemic brings, Vancity stayed the course and continued to believe in the long-term, value-creating opportunity that our students represent.”

Established in Canada in 2015, Brighter Investment is a privately-held financial services company. In addition to lending, Brighter Investment arranges mentorships for its borrowers to support them in their academic endeavors and finding employment. As of 2020, the company has invested in 389 students, of whom 93 have graduated.

Vancity was established in 1946. The financial co-operative provides financial products and services such as loans, deposits and credit cards to individuals, NGOs and businesses. As of 2019, it operates 60 branches, with 2,675 employees, 544,000 members, and assets of CAD 23.2 billion (USD 17.1 billion).

By Jessica McLeod, Research Associate

Sources and Additional Resources

Direct contact with Brighter Investment

Brighter Investment story: “Major Milestone – Vancity is Brighter Investment’s First Institutional Investor”
https://www.brighterinvestment.com/blog/major-milestone-vancity-is-brighter-investments-first-institutional-investor

Vancity homepage
https://www.vancity.com/

Vancity 2019 Annual Report
https://annualreport.vancity.com/_doc/Vancity_2019_AR.pdf

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