Credit unions in Nova Scotia are working with the province’s business-development agency to improve the delivery of lending and other financial services to small and medium-sized businesses.

Nova Scotia Business Inc., the provincial agency, Credit Union Central of Nova Scotia and the Nova Scotia Co-operative Council have signed a memorandum of understanding designed to provide businesses with greater awareness of, and access to, each other’s services, says Bernie O’Neil, president and CEO of CUCNS, which represents credit unions in Nova Scotia and Newfoundland and Labrador. The co-operative council is the economic development arm of the co-operative and credit union sector.

For both the credit unions and NSBI, what’s driving the new deal — a first for credit unions in Canada — is the allure of more business and business growth.

O’Neil says credit union reps are immersing themselves in the programs and financial offerings available from NSBI.

The new agreement is not intended to fund specific types of business ventures. Rather, it is “simply an agreement to collaborate within the marketplace. It really is a business development agreement,” says Pat Ryan, NSBI’s chief operating officer.

If a credit union can’t provide a business owner with the financing required, it will look to NSBI’s programs to see where there might be a fit, and vice versa. Likewise, the co-operative council refers businesses to either organization, depending on what is needed.

“NSBI can be a viable option (for money),” says O’Neil. “The credit union will identify where opportunities may lie.”

Meanwhile, NSBI will look at how credit unions can help support local business ventures. “There are opportunities for us to co-invest or refer requests for investment to each other,” says Ryan.

According to a recent survey by the Canadian Federation of Independent Business, services provided by credit unions earned the highest level of satisfaction from small-business owners, says Leanne Hachey, the CFIB’s director of provincial affairs in Nova Scotia. “Credit unions, relatively speaking, are doing a good job compared with their competitors,” she says.

However, credit unions can be hard to find, she notes. “The credit union is not in every community. Fewer [of the CFIB’s] members bank with credit unions. There is room for improvement on reach.”

O’Neil hopes the new agreement will generate more awareness about credit unions’ offerings and give credit unions greater access to business, and to funding for business through joint initiatives with NSBI. At present, the credit unions in Nova Scotia are also partners with the provincial government in a unique loan-guarantee program for small business that provides up to $150,000. “NSBI programs go considerably higher,” he says.

For its part, NSBI will get extended reach through its affiliation with the credit unions. Credit unions have a physical presence in more communities across the province than Halifax-based NSBI. And credit unions loan money to sectors that NSBI is prohibited from funding, such as the retail industry,

But Hachey is not convinced NSBI’s partnership with the credit unions will be as lucrative as the government agency hopes. “For many reasons, our members aren’t dealing with NSBI,” she says. “Only 4%-5% of our members have ever gone to NSBI. I wouldn’t imagine a whole lot of business would be generated by the agreement.”

Hachey’s members, primarily small, independent business owners, feel NSBI is set up to help larger enterprises — those that need bigger bucks but also employ more people.

Still, she admits, hitching its coattails to the credit unions is a smart business move on NSBI’s part: “Credit unions are such a success story with small business that this may be a way for NSBI to tap into the small-business market.” IE