Mi'kmaq couple opens their own loan business at Elsipogtog First Nation

Buffy Peters and Quentin Sock say they knew people in their community who needed financial help. They hated having to track down the person and ask for their money back, so they were skeptical of loaning.

But now the Mi'kmaq couple has started a business offering short term, also known as payday, loans.

The Financial Consumer Agency of Canada warns consumers that payday loans are an expensive way to borrow money and to consider other, cheaper options. Many provinces have enacted regulations that cap the cost of borrowing on payday loans.

"We understand people mess up and that they might have bad credit, but that does not mean they are unable to pay off a loan," said Peters, who is from Elsipogtog First Nation.

"Of course we have our own review process and not everyone is approved."

They started Maqaltu'ltes short term loans the last week of September and have already loaned around $10,000, which is largely financed through the couple's Arbonne sales business.

Maqaltu'tes is Mi'kmaw for "I will lend you."

Borrowers screened

Peters and Sock say most of their clientele are low and middle income families looking to cover something like a car payment until their next paycheque. The loans range from $60-$700, with a two to three week period for repayment.

They've loaned to people in P.E.I, N.S, and N.B. Potential borrowers are screened and Sock says it's imperative they have a source of income, aside from social assistance or family allowance.

"We're not in the business of putting people into debt. We're trying to help people financially, not cripple them," said Sock.

Besides screening beforehand, they also arrange a pre-authorized debit to ensure repayment. If borrowers don't take initiative to pay what they owe, the money comes out of their bank account. 

Randy Augustine, a car salesman and a member of Elsipogtog First Nation, said he borrowed $300 at 15 per cent interest, the maximum rate allowed in New Brunswick for payday loans.

The 38-year-old said he liked supporting an Indigenous business.

"I sell cars so I know securing loans isn't very easy when you're Aboriginal," said Augustine.

"I think it's a genius idea and I wish I would have thought of it."

Augustine hopes to see them expand, and one day offer instalment loans. Instalment loans are larger loans with a longer period of time to pay, and repayment by instalments.

'Maybe one day we can be a bank'

Bertha Duncan is another client. She has six children and had to take leave from work as as she battled cancer. 

Duncan needed to take her children to see their grandfather in the hospital in Digby, N.S., and she needed help getting there.

"Sometimes in [Elsipogtog] there are people that are living paycheque to paycheque," she said, and when an emergency occurs, resources are limited.

She said she asked family and friends, but they couldn't help. 

Peters started developing the business in August. She had meetings with business managers at banks in Richibucto and Moncton and they screened her credit to see her viability for a loan business. During those meetings she heard about someone who started a similar small loan business and now owns a bank.

"Maybe one day we can be a bank," said Peters.

Peters and Sock both say a bank is needed in Elsipogtog. 

They've already had requests for loans to help with lobster boats, which is out of their current loan range but they hope to build to it someday. Right now they're hoping to secure enough capital to get a permanent business location.