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Financial literacy, a Windmill loan benefit

5 August 2020
Author: Paula Calderon
 
As a registered charity offering low-interest microloans to help skilled immigrants and refugees achieve career success in Canada, Windmill Microlending is not your traditional lender. The organization’s support to newcomers goes beyond offering loans. Windmill provides additional benefits to clients. Financial literacy is one of them.
 
Immigrants and financial literacy
 
Understanding the Canadian financial system can be challenging for many newcomers.
 
In some cases, immigrants come from countries where credit products are not common, and cash is the chosen method of payment. In other cases, negative experiences have resulted in apprehension about the safety and reliability of the financial system.
 
Therefore, it is valuable for newcomers to receive financial literacy information while they are building or rebuilding their credit. They need to be aware of the basics of budgeting and saving.
 
Credit history and financial behaviour
 
Although building good credit history and adopting desired financial behaviour should be a priority for immigrants, not having access to mainstream banking products due to lack of credit history in Canada makes it difficult.
 
A Windmill loan not only helps newcomers pay for the Canadian credentials they need;  they also begin to develop good financial habits and financial behaviour.
 
Clients can work with a mentor and partners who offer additional support and have access to coaches who are also financial literacy facilitators. Equally valuable, when they repay their loan, clients have not only achieved their career goal but have also built the credit history they need to access mainstream banking products.
 
Supporting immigrants’ financial literacy
 
To support newcomers, Windmill’s coaches receive financial literacy training from Prosper Canada, and in turn, educate their clients. 
 
The training has provided a professional development opportunity for frontline Windmill staff and value-add to the organization since it helps the team serve clients better.
 
Windmill’s goal is to empower clients to make the best financial decisions, and the training offers the knowledge to discuss credit in Canada and debunk the common newcomer misconception that credit is a bad thing.
 
“During my coaching sessions, I apply what I learnt when talking to clients about their budget and credit report. I can assess and identify if a client truly understands the impact of credit and debt as well as if they are open to the education,” indicates Tyler, a Windmill coach.
 
Financial literacy for clients
 
After Windmill clients’ financial literacy is assessed, coaches provide advice, support and guidance on topics such as budgeting, credit basics, money-saving tips and debt.
 
When coaches identify the need for further financial literacy, clients are referred to online money management modules available through Prosper Canada. This is a huge benefit to Windmill clients since they receive valuable information while allowing them to identify ways in which they can improve their financial situation.
 
Over 50 per cent of Windmill clients are referred to Prosper Canada, and 95 per cent find the experience beneficial.
 
One Windmill client had this to say. “I learnt how to manage my expenses smartly. For example, the difference between wants and needs and how setting up a savings goal and making a budget helps.”
 
Final thoughts
 
Windmill Microlending’s goal is to see newcomers succeed and contribute to the Canadian economy. By providing them with support from Prosper Canada, both organizations demonstrate a strong commitment to supporting financial literacy and economic recovery of a very vulnerable part of Canada’s population.

Windmill Microlending is a registered charity serving newcomers since 2005. We offer microloans to help skilled immigrants and refugees continue their careers in Canada. Funded by the public and private sector, Windmill is Canada’s largest and most successful microlending program for immigrants and refugees.
 

THE AUTHOR

Paula Calderon is Windmill Microlending’s National Director, Client Success. Originally from Colombia, Paula has spent her career leading workforce development projects that support the economic integration of newcomers to Canada.

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