By way of background, the Superintendent has a statutory responsibility to be satisfied of the following matters.
- The plans for the conduct and development of the business of the credit union or caisse populaire are feasible and sound.
- The credit union or caisse populaire will be operated in accordance with co-operative principles.
- The credit union or caisse populaire will be operated in such a way that deposits will be safeguarded without the likelihood of a claim against the Corporation.
- The credit union or caisse populaire will be operated responsibly by individuals who, by virtue of their character, competence and experience, are suited to operating a financial institution.
- The incorporation of the credit union or caisse populaire will serve the best interests of the cooperative financial system in Ontario.
A business plan will address these requirements.
Key elements we believe should be addressed in your business plan:
- Organization chart
- Brief description of the activities of organization
- Discussion of the rationale for the proposed structure.
Outline the proposed structure for membership shares. If you are proposing to attract a significant amount of deposits, you should also include a plan on raising capital. This can be in the form of ‘share offering’.
Detailed descriptions of the activities to be carried out initially, and over the long term, if applicable:
- Investment Counselling
- Credit Counselling
- IRR Management
- Hours of Operation
Do you expect to attract new members? If so, what is the strategy?
- Organizational chart
- Implication for costing
- Board of Directors - experience and background of proposed members
- Audit Committee- experience and background of proposed members
- Management - experience and background of proposed members
- Similar information for the Credit Committee if available
- Future staffing requirements should be consistent with long-term objectives
Provide assumptions for the following, if applicable;
- Membership targets and asset growth
- Funds allocation (ie. through loans or investments)
- Borrowing needs, including growth and cost assumptions
- Loans (if you intend to provide a borrowing facility to your members), including growth and rate assumptions
- Other income, whether by annual assessment or fee for service
- Operation expenses, including details of occupancy costs, salaries, depreciation, audit fees, start up, advertising, etc.
You need to project: Balance Sheets, Income Statements and an Undivided Earnings Statement. Once this is completed, a ratio analysis should be prepared based on these numbers. The specific types of ratios should closely match key ratios produced by the Deposit Insurance Corporation of Ontario.
Detailed investment and lending policies and procedures will also be required as part of the business plan.