Rethinking your investment portfolio? Investing locally in the Kootenays just got easy

In a global pandemic, local resilience is taking on broader, more diverse meanings.

So let me introduce Eden Yesh from Invermere, a visionary who believes in local investment opportunities through Community Investment Cooperatives (CIC). A CIC is a community-owned and -controlled impact fund.

“The longer a dollar can circulate in our local communities, the greater its economic impact,” Yesh said. “During the economic turmoil that COVID-19 is causing, it is now more important than ever for communities to invest in place to ensure we are self-reliant and resilient.”

Yesh is one of the primary sparks behind Community Investment Cooperatives as chair of the BC Community Impact Investment Coalition. He works for Kootenay Employment Services as its regional community and economic development manager.

“After the immediate crisis of this pandemic has passed, many Canadians will be unemployed or in severe financial distress, and businesses will need to recover from lost revenues,” said Yesh. “Investment Co-ops offer one way for Kootenay residents and British Columbians to direct a modest amount of their savings into investments that will help their worst-affected neighbours get back on their feet.

“Local investment tools, such as these Co-ops, can significantly reduce other expenditures by provincial and federal governments and the burden on the public purse of EI and social assistance payments.”

Eden Yesh is a leading figure in the Investment Co-op movement in B.C. and the driving force behind the creation of both the West and East Kootenay Investment Co-ops. — Photo courtesy Eden Yesh

The ABC’s of Community Investment Co-ops

Keeping currency local is one of the foundational principles of Community Investment Cooperatives (CICs). Current investment options and regulations in Canada significantly restrict options for investing locally, according to Yesh.

“The result is that nearly all investment capital leaves local communities and is placed into far-off stock markets and corporations,” he said.

Another result is that our rural businesses and entrepreneurs lack access to capital for start-ups or expansions. CICs solve these problems.

“They are a new and innovative support system for rural economic and business development that effectively bridges the gap between local investors and local ventures in need of financing,” Yesh said.

Paul Butler, president of the West Kootenay Boundary Community Investment Co-op. — Photo courtesy City of Trail

“They enable residents to become partners in locally driven economic development, which leads to stronger and more sustainable economies. In other words, your money won’t be in stocks and mutual funds, but more importantly in local projects and people.”

Here’s the way CICs work:

• Members of the Investment Co-ops pool their money together to directly support businesses in their communities that are making an impact.
• Businesses within the Co-op’s region can apply for financing that works for their unique needs. Approved applicants receive business development guidance, collaborative financing and ongoing support.
• The Investment Co-ops leverage their member’s investments with traditional financial institutions to provide the capital businesses need to grow.
• The Co-ops’ capital is invested into local businesses that provide economic, social, environmental and community impacts.

The bottom line is that CICs believe in doing good while making a profit.

Two new investment opportunities in the Kootenays

Over 400 residents, 44 communities and dozens of organizations helped create the West Kootenay Boundary Community Investment Co-op and the East Kootenay Columbia Community Investment Co-op.

Their genesis goes back to 2018, when three organizations—Kootenay Employment Services, BC Rural Centre and the Province of BC—launched the Mobilizing Local Capital project in partnership with dozens of East and West Kootenay and Boundary economic development organizations. On December 31, 2018, the Investment Co-ops successfully incorporated with over 200 founding members.

Hugh Moore, president of the East Kootenay Columbia Community Investment Co-op — Photo courtesy Hugh Moore

Paul Butler is president of the West Kootenay Boundary Community Investment Co-op.

“As a branch manager of a local credit union, I see the value of the member-owned co-operative model,” Butler said. “I’m honoured to chair the new WKB Community Investment Co-op. This new investment tool offers so many opportunities for community resiliency, recovery and relationships.”

Hugh Moore, president of the East Kootenay Columbia Community Investment Co-op, said, “The Community Investment Cooperatives across the province and the country will play an integral role in the revitalization of existing businesses—and the development of new businesses—in the economy that will emerge post-COVID-19. The ability to provide impact investments is one that the Investment Cooperatives are keen to embrace when the opportunity presents itself, as we know it will.”

Advice to investors

Yesh’s advice is straightforward: “We encourage all residents and organizations in the Kootenay region to invest a modest portion of their investment portfolios in our region.”

Here are the benefits for investors:

• Be the first to know about local investment opportunities
• Stay connected to local investments through regular updates and meetings
• Meet other local investors
• Sit on the Board or on an Investment Committee
• Mentor a business
• Receive dividends when the Co-op profits

Currently, over 100 member-investors have joined each of the Kootenays’ newest CICs.

Partnering with local financial institutions

The Investment Co-ops look to collaborate on financing with both the local credit unions and Community Futures Development Corporations, Yesh explained.

Credit unions provide banking services and syndication on financing activities. The Community Futures Corporations assist the Investment Co-ops with the risk assessment, due-diligence, financing and repayment functions.

Typically the Investment Co-ops will finance ventures using loans. However, the Investment Co-ops are open to equity investments and joint-venture opportunities case-by-case.

Advice for entrepreneurs

Both CICs are now accepting applications. The application forms are concise, and entrepreneurs are encouraged to apply online.

According to Yesh, the West Kootenay Boundary Co-op has issued its first loan in March 2020, and several other applications are close to finalization and disbursement.