Land without leverage

2 min read · October 3, 2025
New Power Labs

The Indian Act, first introduced in 1876 and amended many times since, continues to impose financial restrictions that limit wealth creation and access to capital for Indigenous communities in Canada.

The Indian Act prohibits the use of reserve lands and properties as collateral for loans. As a result, Indigenous individuals face major barriers in securing financing from mainstream financial institutions to start or expand businesses - one of several ways the Act continues to limit economic opportunities.

Without the ability to use land and properties as leverage, a fundamental tool for wealth creation is inaccessible.

This is where Indigenous-led solutions step in. Aboriginal Financial Institutions (AFIs) are vital players in bridging this systemic gap. 

With decision-makers who have a deep understanding of their community and a deep expertise in providing financing for Indigenous entrepreneurs and communities, AFIs are able to work with diverse risk profiles and have recorded a 97.5% repayment rate. For every $1 million in lending by AFIs, $3.6 million is added to Canada’s GDP.

Financial reconciliation requires more capital to be invested in Indigenous communities, and it needs us to dismantle the systemic barriers and support the Indigenous-led solutions that are already in place.

Narinder

New Power Labs

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