Evaluation of Business Capital and Support Services

1.2.1 Background and Description

Business Capital and Support Services (formerly the Aboriginal Business Development Program), is a sub-program of the Aboriginal Entrepreneurship Program. As a component of the Federal Framework for Aboriginal Economic Development, its intent is to provide a focused, government-wide approach, including improved alignment of federal investments to target opportunities; to respond to new and changing conditions; and to lever partnerships in order to address persistent barriers that impede the full participation of Aboriginal people in the Canadian economy.

Business Capital and Support Services is designed to contribute to the Framework's strategic priorities of Strengthening Aboriginal entrepreneurship and Forging new and effective partnerships by improving access to capital. The program included the Loan Loss Reserve (discontinued in 2012), which was intended to assist First Nation businesses in addressing the constraints of Section 89 of the Indian Act (which prevents the pledging of assets as collateral to secure debt financing.

The program supports access to debt and equity financing by Aboriginal businesses through a network of Aboriginal Financial Institutions (AFIs). These institutions provide entrepreneurs with a range of services such as financial assistance, advice for business operations, and referrals to other sources of financing and advice. The program is open to Aboriginal entrepreneurs, whether on- or off-reserve, and in urban, rural and remote areas. The program supports youth entrepreneurs, business expansions and new businesses. Throughout the existence of the program, there have been between 55 and 60 Aboriginal Financial Institutions that act as developmental lenders (i.e., for enterprises that are not ready to secure business loans from banks) and that offer business advisory services.

Access to capital is further supported by a number of mechanisms, including:

• Aboriginal Business Financing Program: to provide a mechanism for the delivery of non-repayable contributions to a maximum of $99,999 for Aboriginal entrepreneurs and $250,000 for community owned Aboriginal businesses.
• Aboriginal Developmental Loan Allocation; to provide a consistent and reliable mechanism to compensate AFIs for qualified developmental loan losses and the high cost of developmental loan administration.
• Interest Rate Buy-Down - an interest rate subsidy for qualifying Aboriginal Financial Institutions that wish to increase their loan capital pools by securing credit lines with mainstream financial institutions. These credit lines provide a top up to capital. AFIs must pay the unsubsidized component of the interest rate to the lending financial institution.
• Enhanced Access Loan Fund - provides additional loan capital to an AFI in order to allow it to expand outside its normal catchment area in order to service unserved or under-served areas. As a loan fund, capital must be repaid to replenish the fund as loans are paid out.
• Aboriginal Capacity Development Program - This component funds products and services to help improve the management practices of AFIs.

1.2.2 Objectives and Expected Outcomes

The Aboriginal Entrepreneurship Program supports the achievement of the Land and Economy Strategic Outcome of Full Participation of First Nations, Métis, Non-Status Indians and Inuit individuals and communities in the economy. The sub-program outcome for the Business Capital and Support Services is a sustainable network of Aboriginal Financial Institutions. The immediate outcomes of the Business Capital and Support Services sub-program are: increased capacity of Aboriginal Financial Institutions to deliver business capital and support services; and the expansion and diversification of capital pools for Aboriginal business development. The ultimate program outcome for Aboriginal Entrepreneurship is the creation and/or expansion of Aboriginal business.

1.2.3 Program Management, Key Stakeholders and Beneficiaries

INAC regional offices are responsible for supporting economic development and business opportunities by:

• gathering business, market and industry research intelligence from open sources and providing needs and gaps assessment on economic initiatives in order to identify potential Aboriginal business opportunities;
• supporting the development of frameworks and partnerships to provide access to both public and private sector driven major business opportunities;
• providing advice to Aboriginal communities on major business projects proposals; and
• providing analysis and recommendation on major business projects.

In 2013, INAC devolved program delivery to 14 of the AFIs, referred to as Program Delivery Partners. The remaining AFIs are responsible for referring clients to an appropriate regional Program Delivery Partner for business financing and support services where applicable. Program Delivery Partners offer developmental loans and non-repayable contributions (up to $99,000 for individuals and up to $250,000 for communities) in support of business development. AFIs also provide developmental loans. Loan amounts are decided based on various variables (e.g., percentage of loan portfolio), and may reach values between $250,000 and $350,000. Above this amount, businesses would have to seek additional loans from traditional banks.

On April 1, 2015, responsibility for the administration of programming was transferred to the National Aboriginal Capital Corporations Association (NACCA), which is now responsible for the delivery and administration of the following programs until 2016-17:

1. Aboriginal Developmental Loan Allocation: to provide a consistent and reliable mechanism to compensate AFIs for qualified developmental loan losses and the high cost of developmental loan administration.
2. Aboriginal Business Financing Program: to provide a mechanism for the delivery of non-repayable contributions to a maximum of $99,999 for Aboriginal entrepreneurs and $250,000 for community owned Aboriginal businesses.
3. Enhanced Access: to provide funding for AFIs to serve territories that were not specifically defined in government funding agreements or the legal charter under which they were established as an AFI.
4. Interest Rate Buy-down: to encourage an increase in developmental lending by providing funding to qualified AFIs to secure additional loan funds from sources of commercial capital: e.g., banks, trust companies and other arms-length private lenders of capital.
5. Aboriginal Capacity Development Program: to offer a modern and valuable training for AFIs by focussing educational support on the effective and consistent delivery of developmental lending across the AFI network.

1.2.4 Program Resources

From 2009-10 to 2015-16, the total planned investment for Business Capital and Support Services and its related activities was $323 million. Specifically, this included $251 million to be expended from 2009-10 to 2013-14; $36.4 million for 2014-15; and $35.6 million for 2015-16. Actual expenditures from fiscal year 2009-10 to 2014-15 are noted in the table below. From 2009-10 to 2014-15, actual expenditures have decreased by 36 percent. Additionally, as a result of the shift in the program delivery model to NACCA, there was not ongoing need for comprehensive full-time equivalent support, which explains the significant decrease in actual salary expenditures between 2012-13 and 2014-15.

Relevance

Continued Need

1) Does the Access to Capital and Business Services still address an existing and demonstrable need in Aboriginal communities?

2) Is the Access to Capital and Business Services responsive to the Aboriginal businesses capital needs?

Alignment with Government Priorities

3) To what extent is the Access to Capital and Business Services consistent with: (1) federal government priorities; and (2) departmental strategic outcomes?

Alignment with Federal Roles and Responsibilities

4) Is there a legitimate, appropriate and necessary role for the federal government in the Access to Capital and Business Services?

Performance

Effectiveness

5) To what extent has the Access to Capital and Business Services achieved its stated immediate, intermediate, and if possible, ultimate outcomes using the previous delivery model?

6) Have there been positive or negative unintended outcomes? If so, were any actions taken?

Efficiency and Economy

7) Is the new delivery approach the most economic and efficient means of achieving the intended objectives?

Design and Delivery

8) To what extent has the design and delivery of the programming facilitated the achievement of outcomes and overall effectiveness?

9) Has the new delivery model been implemented as planned?

10) What are the factors (both internal and external) that will facilitate or hinder the implementation of the new delivery model?

Other Issues

Lessons learned/Best Practices

11) Did the Access to Capital and Business Services take into account lessons learned from the previous internal evaluation recommendations? Are there any lessons learned/best practices that could be used for the improvement of the Access to Capital and Business Services Program?

Performance Measurement

12) To what extent has the umbrella Performance Measurement Strategy of the Aboriginal Entrepreneurship Program: i) contributed to performance measurement? ii) has the strategy been implemented as expected; and iii) has it supported the evaluation's assessment of results)?

2.3.1 Data Sources

• Literature and Document Review:
  The literature review included an extensive review and summary of some 60 articles related to access to capital, Aboriginal business and entrepreneurship, and Aboriginal economic and social issues relevant to the program. These included peer-reviewed journal articles, government and non-government commissioned studies, and other articles cited throughout this evaluation report. Other internal and government documents were examined where applicable, for program background, as well as other assessments of the Business Capital and Support Services or related programs.
• Data Analysis:
  Summary data obtained from Program Delivery Partners included: application data and the results of applications; the number of businesses supported; the dollar value and proportion of total available funds committed; and the amount leveraged. The data largely focuses on the Program Delivery Partners themselves rather than on Aboriginal businesses. Their funding distributions are broken down by: client contribution; program equity; Aboriginal Financial Institution debt financing; commercial financing, and other government contributions.
• Key informant interviews:
  Semi-structured key-informant interviews were conducted with eleven INAC employees at headquarters and regional offices. Further, three additional interviews were conducted with other Aboriginal business experts, including a member of the National Aboriginal Economic Development Board, the Louis Riel Capital Corporation and the Métis Voyageur Development Fund. A group interview was also conducted with three representatives of the NACCA.
• Site Visits:
  Site visits to four Aboriginal Financial Institutions (three of which were Program Delivery Partners) included interviews with ten business owners and eleven business specialists and employees (Chief Executive Officer, General Managers, and loan managers). Site visits included analyses of administrative documents and data, interviews with key respondents and focus groups and on-site observations. These analyses provided quantitative and qualitative insights into the extent to which the intended outcomes of business capital and support services are occurring.

2.3.2 Considerations, Strengths and Limitations

Due to limited resources for this evaluation, its start time was delayed by six months and it faced further challenges of resource turn-over, which contributed to further delay. The program has also recently undergone significant change in program delivery. In some ways, this may impact the relevance of some of the findings, as recent changes may mitigate some of the issues raised, or could ameliorate some of the successes or limitations going forward. To the extent possible, however, every effort was made to contextualize observations in light of the new delivery model under NACCA.

4.1.1 Immediate Outcome 1: Capital pools for Aboriginal businesses are established, expanded and diversified.

Since the initial creation of AFIs in the 1980s, they have achieved notable success in terms of supporting the development and expansion of Aboriginal businesses on- and off-reserve. For instance, since their inception, AFIs have provided over $2 billion in financing to Aboriginal businesses, representing over 38,000 loans. More recently, NACCA's latest Aboriginal Financial Institutions Portrait for fiscal year 2014 shows that AFIs provided 1,361 loans to Aboriginal businesses, totaling $110 million.^{Footnote 11} Of these, 480 loans were for starting businesses and 727 new loan advances were provided to existing businesses for expansion purposes.^{Footnote 12}

Some of these achievements can be attributed to the establishment of various capital tools, which have, in turn, established capital pools to help support the start-up and expansion of Aboriginal businesses. Such tools include: repayable loans; non-repayable contributions; loan-loss guarantee, interest rate buy-down; and the Aboriginal Business Developmental Lending Allocation. These capital tools are discussed in further detail in Section 1.2.3.

Site visit and interview participants unanimously agreed that these tools have enabled AFIs to continue supporting developmental loans to Aboriginal entrepreneurs that would be seen as higher risk by mainstream financial institutions. In particular, participants expressed that the Aboriginal Developmental Loan Allocation has encouraged AFIs to engage in higher risk developmental lending by compensating for potential loan losses. Non-repayable loans have also helped reduce the risk of developmental lending, hence enabling AFIs to be less risk adverse. However, despite such tools, AFIs have not been able to generate sufficient loan portfolio revenue from 2009 to 2014 (the latest years for which data is available) to recover their cost of capital.^{Footnote 13} Even though the Aboriginal Developmental Loan Allocation was established to provide a revenue source for the loan portfolio, there was no obvious impact (as shown in Figure 1). The 'cost of capital' is measured by the following four elements:

• Administrative expenses (AE) - the amount of administrative expense expressed as a percentage of the loan;
• Loan losses (LL) – the amount of loan loss expected, based on probability of default expressed as a percentage of the loan;
• Cost of funds (COF) - the amount of interest paid to a senior lender expressed as a percentage of the principal of the loan; and
• Desired capitalization rate (CR) – the amount allowed for profit and growth expressed as a percentage of the loan.^{Footnote 14}

The cost of capital is therefore calculated as:

AE + LL + COF + CR / Gross loan portfolio = Interest rate charged.^{Footnote 15}

From 2009 to 2014, the AFI network experienced a shortfall in the ability to recover the cost of developmental lending, representing an average of seven percent (see Figure 1).

Text alternative for Figure 1: Cost of developmental lending relative to loan portfolio revenue (2009-2014)

This is a bar graph with the x axis containing fiscal years 2009 to 2014, and the y axis being the percentage gross loan portfolio. Each fiscal year has two bars, one representing loan portfolio revenue, and the other representing cost of developmental lending. The bar representing loan portfolio revenue varies slightly between 8 and 9 percent over the six fiscal years. The bar representing cost of developmental lending is approximately 16 percent in 2009 and 2010; approximately 14 percent in 2011; and 16 percent from 2012 to 2014.

While it is clear that the shortfall has eroded the capital base of AFIs on average, some have taken certain measures to address this issue by reducing risk tolerance levels, improving risk management practices and developing other revenue streams. The concern with this approach is that providing loans to lower-risk projects defeats the initiative's purpose of providing an avenue for higher-risk lenders who may have less access to traditional financial institutions, or who may need more direct support not provided by traditional institutions. In an effort to expand the capital pool, many site visit and interview participants cited the need to promote capital attraction that is specifically directed at attaining private capital for AFIs to better support the needs of their clients.

The extent to which capital pools have been expanded or diversified, however, is less clear, as INAC does not systematically collect data that would speak to the expansion or diversification of portfolios. An internal audit conducted in 2014^{Footnote 17} supported the notion raised by interview participants in this evaluation, who stressed the need for a more systematic and national approach to outcome and data collection. In particular, and as discussed further in Section 5.2, while this program shows positive results with respect to economic benefits, measurement of these results should better account for the incremental benefit of government investment in the AFI network respecting economic impacts and social impacts. Particular attention should be focused on the rapidly developing field of metrics for social return on investment and the indicators that can potentially be used by government and the private sector in assessing both the quantitative and qualitative benefits from investing in the AFI network.

In this respect, INAC should work with NACCA, the AFI network and other potential stakeholders with the objective of developing both quantitative and qualitative indicators, which can be used to measure economic and social impact by the network, allow for comparison where possible with other government economic development programs and provide information on economic and social impact to potential social finance investors who look for these types of metrics in addition to the traditional financial risk/return analysis.

Recommendation 1: Ensure that in its Terms and Conditions, NACCA collects appropriate performance data from the AFI network.

Ultimately, however, as pointed out by interviewees, where economic potential exists, there is a potential for higher profit by investors and lenders. While government investment in capital is critical, there is also room to work to attract private investment as well as investment from other levels of government. INAC's current role with respect to policy and direction of Business Capital and Support Services, enables it to focus on incentivising investment from other sources, which in turn has the potential to address some of the limitations presented by existing capital shortfalls.

Recommendation 2: Establish incentives to attract interest and investment from the private and other sectors to leverage additional capital and diversify the portfolios of AFIs.

4.1.2 Immediate Outcome 2: Aboriginal Institutions have the capacity to deliver business capital and support services

Site visit and interview participants indicated that while the initiative supports the capacity of AFIs to deliver business capital and support services, not all AFIs have the necessary capacity to deliver the initiative. "Capacity" is interpreted as: (a) AFI staff having the appropriate knowledge to deliver the initiative; and (b) AFIs having the appropriate level of capital to continue operations and meet demand.

AFIs assist clients in gaining access to capital through equity financing, and business services by providing them with continued support in the form of before and after care services (i.e. working with clients to help find financing options that suits their needs, establishing business plans, offering advice/mentoring for growing businesses, supporting marketing initiatives, etc.). In doing so, AFIs manage a significant number of loans while also creating and maintaining jobs each year. For instance, for each start-up loan that was provided in 2014, an average of 2.5 jobs were created and for each loan that was provided to an existing business supported created or maintained an average of 4.2 jobs.^{Footnote 18} These represent positive impacts and while it would be helpful to understand the impact they have on dependency rates for income assistance and employment rates, they are difficult to measure.

NACCA specifically indicates that between fiscal years 2009 and 2014, the annual average value of loans was $109.4 million and an annual average of 1306 loans was provided. See Table 2 for a detailed breakdown.

Site visits and interview participants suggest that much of the success of AFIs is attributed to a dedicated and strong staff with a mix of professional experience in the public and private sectors, including traditional banks, credit unions, and the federal government. Strong human resources has also led to some AFIs, such as Ulnooweg Development Group Inc. and the All Nations Trust Company, to diversify their business activities to include mortgage lending, and providing trust and administrative services in order to generate alternative sources of income. Others have been recognized for their notable achievements, such as the Tribal Wi-Chi-Way-Win Capital Corporation in Manitoba that received the 2012 Manitoba Chambers of Commerce award for the most outstanding medium-business for its contributions to supporting Aboriginal business development.

While these represent significant achievements, it is difficult to specifically ascertain the extent to which how many AFIs are operating at a high and low capacity due to a lack of data. Some AFIs have struggled to continue operations. For instance, some AFIs have had to claim bankruptcy while others (45.5 percent) have recorded unprofitability from fiscal years 2010 to 2014.^{Footnote 20} Aboriginal Capital Corporations, in particular, have been profitable three times out of the past six years; from 2009 to 2014 (see Table 3). Additionally, NACCA cites that as of March 2014, 18 AFIs had less than the minimum required six month loan supply on hand to meet demand where business capital and equity needs currently exceed AFI capacity.^{Footnote 21} Some possible explanations for such cases include erosion of capital base for lending due to covering operating costs when revenue from interest rates are not sufficient; limited access to other sources for capital; and of the capacity to discern strong from weak investment opportunities.

The Aboriginal Capital Corporation model, developed in the 1980s, was designed to be self-sustaining. It was projected that loan portfolio revenue would be 12 percent, administrative costs at six percent, loan losses at five percent and a profit of one percent was projected to support growth.^{Footnote 23} However, data from 2008 to 2012 shows that on average, loan portfolio revenue is 8.7 percent, administrative expenses are 9.8 percent, and loan losses are 5.8 percent, which created a cost of developmental lending shortfall at 7.5 percent.^{Footnote 24} The concern with this model is that its assumptions are based on trends of 30 years ago, and thus, does not consider the significant change in interest revenue norms, administrative costs, and inflation since that time.

Furthermore, site visit and interview participants, in addition to documentation and studies from the National Aboriginal Economic Development Board, an equity market demand study, and a study by Hammond Ketilson^{Footnote 25} indicate that AFIs must be sufficiently capitalized in order to provide appropriate support to clients and to meet the growing demand for their services. This has become more difficult to achieve in recent years as expenditures for contributions have decreased by 32 percent from fiscal years 2009-10 – 2014-15 (see Section 1.2.4). In addition, according to the 2013-14 Departmental Performance Report (DPR), only $33.1 million of a total of $45 million was accessed due in part to internal reallocation processes in which almost $5 million was provided to support First Nation Land Management and nearly $10 million was provided for the consolidation of INAC's economic authorities.^{Footnote 26} According to the DPR, "[t]he demand for resources is actually exceeding the current resources provided and, if available, additional resources could be utilized by the Aboriginal Financial Institutions."^{Footnote 27} According to the National Aboriginal Economic Development Board, there is a need to invest an additional $70 million over five years to replenish the capital base of AFIs and to support their operating costs.^{Footnote 28} The 2014 AFI Portrait suggests that in order to better position the 18 AFIs with a loan capital shortage to be able to utilize a Capital Attraction Tool instrument to gain access to private capital, capital top-ups in the range of $78 million are required to provide private investors with reasonable liquidity comfort.

These issues have placed a considerable strain on the AFI network to continue providing appropriate business capital and support services to clients. With respect to Aboriginal Capital Corporations in particular, this has added concern since they do not receive ongoing operational funding (Aboriginal Community Futures receive annual funding to support operational costs). This has negatively impacted their ability to maintain staff and facilities, and to adequately meet demand for their services. With an absence of operational dollars, the expectation was that Aboriginal Capital Corporations would finance their operations through returns on their lending. The higher interest rate environment of the 1990s provided opportunities for these returns for many Aboriginal Capital Corporations. However, as interest rates fell over the years, many lowered their interest rates in order to continue lending with reasonably competitive rates. As a result, some saw the size of their capital pool diminish, thereby impacting the degree to which they are able to serve current and prospective clients.

Due to such challenges, capacity building will be an ongoing need for some AFIs in terms of having the appropriate human resources to deliver Business Capital and Support Services programming and to having the appropriate level of capital to continue operations and to meet demand.

4.1.3 Intermediate Outcome: The establishment of a sustainable network of Aboriginal Financial Institutions

Many Aboriginal Financial Institutions have considerable expertise and have clearly demonstrated capacity to work with Aboriginal businesses and entrepreneurs in advisory and mentorship roles. Additionally, there is a clear demonstration that Aboriginal Financial Institutions provide essential capital and support services. Many lack sufficient capital, however, to fully meet the level of demand, and the small pool and limited portfolio of businesses covering a small and higher-risk market means that most Aboriginal Financial Institutions are highly reliant on government support for continued operations.

In 2014, Aboriginal Financial Institutions generated 480 start-up business loans and 727 expansion loans, with a total consolidated loan portfolio of 4,377 loans worth $311 million,^{Footnote 29} and 6.64 percent average interest yield on the consolidated loan portfolio of the 54 active Aboriginal Financial Institutions at that time.^{Footnote 30} Contractual delinquency data from 43 of those Aboriginal Financial Institutions indicates that approximately 12.4 percent of loans in 2014 were in arrears (delinquent), a decrease of almost eight percent from 2010.^{Footnote 31} The corresponding consolidated loan loss reserve was 8.91 percent in 2014, representing a decrease from 2010 levels (15.01 percent).^{Footnote 32}

The most recent performance measure examining the effectiveness of Aboriginal Financial Institutions comprises the CAMEL rating system, which measures the financial managerial performance of Aboriginal Financial Institutions. The five areas of managerial and financial performance are: Capital adequacy; Asset quality; Management; Earnings; and Liquidity. Research undertaken by INAC and NACCA has resulted in a modified CAMEL rating system resulting in a highest possible rating of "A" and a lowest possible rating of "Not Rated". "A" signifies an overall achievement of 85 percent or more of benchmark; "B" represents an overall achievement of 70 percent to 84.9 percent of benchmark; "C" indicates an overall achievement of 60 percent to 69.9 percent of benchmark; and "D" signifies an overall achievement of less than 60 percent of benchmark.^{Footnote 33} Of the 39 Aboriginal Financial Institutions with available data in 2014, data are presented in Table 4.

The average Aboriginal Financial Institution repayment efficiency rate for the 54 active Aboriginal Financial Institutions in 2014 was 94.7 percent.^{Footnote 34} The sustainability of Aboriginal Financial Institutions, however, is such that despite contributions from INAC for Business Service Officer funding of $2.5 million per year, according to the 2012 AFI portfolio, their profitability from 2007 to 2011 was in fact a loss of approximately seven percent (with a five-year rolling average loan portfolio revenue at nine percent, administrative expenses at 10 percent and loan loss rate at six percent).^{Footnote 35} 54.5 percent of AFIs were profitable from 2010 to 2014.^{Footnote 36}

There was a general consensus among interviewees that without ongoing funding, few Aboriginal Financial Institutions would be able to continue their operations. The Aboriginal Developmental Loan Allocation has helped to stabilize operations of some AFIs, and one AFI in particular had Aboriginal Developmental Loan Allocation revenues of $750,000. However, generally speaking, given the high-risk portfolio and the smaller loan market, the non-repayable contributions are largely part of the key to success for the current system. Without access to those contributions provided by the Government, it was suggested by almost all interviewees that the program would no longer be able to reach smaller markets and more remote areas. As it stands, interviewees suggested that many Aboriginal Financial Institutions are currently able to absorb less than the total demand of viable proposals due to insufficient capital. According to NACCA figures, from 2008 to 2012, the loan capital to gross loan portfolio ratio was close to 1:1, suggesting little flexibility to absorb additional opportunities.

These observations do not suggest a failure on the part of the program to create a sustainable network of Aboriginal Financial Institutions; rather, they suggest that the aim itself may be inappropriate given that the target market is a small one, and one designed to facilitate participation of Aboriginal people in the economy. To address the underrepresentation and bridge the gap caused by smaller markets with higher risk, as well as Section 89 of the Indian Act in the case of on-reserve businesses, it would be reasonable to expect that some level of support would be necessary for the foreseeable future. Given the clear success of the program in creating and expanding Aboriginal businesses, consideration should be given to revising this stated outcome to reflect the extent to which prospective Aboriginal businesses and entrepreneurs have sufficient access to capital and receive appropriate direction and guidance on business creation and expansion, and the extent to which additional capital can be leveraged.

Recommendation 3: Re-assess the intended outcomes of the program considering the recent program changes and the findings of this evaluation.

4.1.4 Ultimate outcome: Creation and/or expansion of viable Aboriginal businesses

INAC's Departmental Performance Reports show that between fiscal years 2009-10 and 2013-14, Business Capital and Support Services exceeded it targets with respect to the creation and/or expansion of Aboriginal businesses, with the exception of fiscal year 2012-13:

• 2013-14 exceeded target: In 2013-14, Business Capital and Support Services supported the creation or expansion of total of 686 Aboriginal businesses, exceeding its target of 650 by nine percent.^{Footnote 37} According to the DPR, this success was in part due to the initiative's transition to third party delivery, "[t]hrough the decentralized PDP delivery model, AFIs are better suited to respond to the local needs of Aboriginal entrepreneurs and communities in funding their projects and initiatives."^{Footnote 38}
• 2012-13 targets were not met: Targets were not met in the 2012-13 according to the DPR, which had a slightly revised performance indicator of "[n]umber and value of Aboriginal business creation and expansion projects supported by Aboriginal Business Development Program." The target was 250 projects (with $15 million in expenditures) by March 31, 2013, and the actual result was 170 projects created and expanded with $12.3 million in expenditures.
• 2011-12 exceeded target: The 2011-12 DPR exceed targets of a revised performance indicator of "[s]urvival rate for Aboriginal businesses that receive a financial contribution from the Aboriginal Business Development Program." The target was 90 percent after one year and the actual result was 94 percent.
• 2010-11 exceeded target: The 2010-11 DPR also exceed its target of "Survival rates of businesses one year after receiving financial contribution from Aboriginal Business Development Program." The target was 90 percent and the actual result was 96 percent.
• 2009-10 exceeded target: The target of the "number of businesses created or expanded" was also exceeded according to the 2009-10 DPR. The target was 250 businesses created or expanded and the actual result was 317.

INAC measures the "viability" of Aboriginal businesses in terms of the repayment efficiency on loans. According to NACCA, the average AFI repayment efficiency rate increased from 92.3 percent in 2009 to 94.7 percent 2014.^{Footnote 39} This compares to a 97.8 percent repayment efficiency rate for Canadian business loans.^{Footnote 40}

At the same time, NACCA produced annual Aboriginal Financial Portraits from 2008 to 2014, which offer information about the operation and performance of the AFI network, including the number of loans that were provided for the creation and/or expansion of Aboriginal businesses. According to these reports, loans provided to Aboriginal businesses by AFIs have steadily increased from 2009 to 2014, (see Figure 2). AFIs provided 1,252 loans in 2009, while a slight decrease is seen in 2010 to 1,242. By 2011, AFIs provided 1,307 loans, totalling $99.9 million. Specifically, 520 loans where for business start-up and the remaining 687 loans were for business expansion. They also supported 15,000 full-time equivalent employment and 3,100 small businesses.^{Footnote 41} In 2012, the number of loans increased to 1,395 worth $122 million. Five hundred and sixty-five of these loans were for business start-up and 755 loans were for business expansion.^{Footnote 42} In 2013, the number of loans decreased to 1,281 (worth $125.9 million), and 1,361 loans in 2014 (worth $110.3 million).^{Footnote 43} From 2009-14, AFIs provided an average 1,306 of loans to Aboriginal businesses.

Text alternative for Figure 2 Number of loans provided by AFIs, 2009-14

This is a line graph with the x axis containing Fiscal years 2009 to 2014, and the y axis being the raw number of loans provided by AFIs. For 2009 there were 1,252; there were 1,242 for 2010; 1,307 for 2011; 1,395 for 2012; 1,281 for 2013; and 1,361 for 2014.

Based on the favourable outcome results reported in the DPRs, the high AFI repayment efficiency rates as indicated in the Aboriginal Financial Portraits, and the increase in the number of loans that were provided to Aboriginal businesses, the ultimate outcome of creations and/or expansion of Aboriginal businesses have shown positive results, particularly for 2009 to 2014.