MADISON, Wis. (11/10/11)--Through its Banca de las Oportunidades program, the Colombian government has invited World Council of Credit Unions (WOCCU) to replicate its Semilla Cooperativa [cooperative seed] rural outreach model to expand financial inclusion in some of Colombia's most marginalized areas.
WOCCU's three-year, $2.5 million program will use mobile technology to bring financial services to 100,000 previously unbanked people in rural and low-income communities nationwide.
WOCCU is working with 12 established credit unions and their 182 points of service to implement Semilla Cooperativa, a savings-based approach in which credit union field officers travel into nearby communities to provide financial services directly to members in a group setting. Beyond increasing membership among rural and low-income communities, the WOCCU program aims to expand the credit union network by at least 10% and develop new microcredit and microsavings products to meet new-member needs.
"Colombia's credit unions grew out of a need for greater financial access in areas of the country that other financial institutions were not reaching," said Brian Branch, WOCCU president/CEO. "Over the years, we have worked with the credit unions to strengthen operations, develop new products and expand outreach. Now we are ready to see how much farther they can reach using mobile technology and a model that has successfully brought access to thousands of Mexico's poorest families."
The Semilla Cooperativa model evolved from a recent three-year WOCCU program in Mexico, where 250,000 people living in marginalized rural communities became credit union members, exceeding the program's targeted 15% market penetration. The credit unions improved efficiency and financial inclusion with new technologies, including personal digital assistants (PDAs), point-of-sale devices, handheld printers and ATMs.
Credit union field officers trained in the model use PDAs and handheld printers to enroll new members, record savings and loan payments, and process small loan applications in the communities they visit. Their monthly visits save members time and money by not having to travel to the credit union, and the technology provides a secure and efficient way to process transactions.
In Colombia, WOCCU will use a similar approach to reach markets that are either geographically isolated or have not joined the formal financial system due to a lack of tailored products and the transaction costs related to reaching the nearest credit union branches. The program builds on the achievements of WOCCU's 2008-2010 program in the country, also funded by Banca de las Oportunidades, in which nine credit unions with 48 points of service streamlined operations to better serve their members and build a foundation to expand to outlying communities.
By the end of the program, credit union membership had increased by 28% (49% of which were women); institutional capital grew by 52%; and the number of savings accounts increased by 43%. Four of the program credit unions are among the 12 participating in the current program.
WOCCU helped Colombia establish its first credit unions 50 years ago. Today the sector has grown to 192 credit unions that serve more than 2.2 million people nationwide.