Vancity’s RRSP-eligible Shared Growth term deposit now designates funds for investment in its local microfinance programs, including peer lending, the credit union announced today.

According to Vancity, a portion of the proceeds from its Shared Growth deposits will now help micro-entrepreneurs including new immigrants and refugees, people with disabilities, aboriginal people and residents of the Downtown Eastside overcome the barriers to borrowing

It said Shared Growth funds currently amount to $4.5 million and are invested in projects and programs with social or environmental value.

The credit union’s peer lending program, which began in 1998, is modeled after the lending circles pioneered by Nobel Peace Prize Laureate Professor Yunus and his Grameen Bank more than 30 years ago in Bangladesh.

Peer lending is a credit arrangement in which a small group of borrowers, usually three to six people, “morally” guarantee each other’s loans in lieu of collateral. The credit union then arranges individual loans starting at $1,000 and escalating up to $5,000., which can be used to purchase equipment and tools, manufacturing supplies or inventory to start up home-based businesses.

“Helping communities to thrive and prosper has always been a goal for us,” said Ellen Pekeles, senior vice-president, strategy, in a release. “To witness what can happen when someone is able to have hope and see a future as a contributing member of society demonstrates that microfinance has a vital role in effecting positive change in our communities.”

Vancity’s other microfinance programs and products include the Shared World term deposit, which invests in international community loan funds. In 2006, Shared World was made available nationally through Citizens Bank of Canada.