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Growing needs are focus of Africa regulators roundtable
LILONGWE, Malawi (12/14/10)--Rapidly growing membership and the increasing need for improved prudential oversight have catapulted Africa’s savings and credit cooperatives (SACCOs), or credit unions, to a new level of need.
Click to view larger imageMalawi credit unions serve people in rural areas like this mango grower.
Credit unions in the African nation of Malawi serve people in rural areas like this Mango grower.Defining credit union-appropriate oversight and operating procedures highlighted the third Africa SACCO Regulators’ Roundtable, sponsored by World Council of Credit Unions (WOCCU), the Canadian Co-operative Association (CCA) and the Irish League of Credit Unions Foundation. The three-day conference, held earlier this month in the east African nation of Malawi, attracted 50 credit union supervisors, policymakers and sector officials from 12 African countries who met to discuss ways to propel their respective credit union systems forward. It was the largest gathering yet for credit union supervisors and policymakers in Africa. Participating countries included Cameroon, Ethiopia, Gambia, Ghana, Kenya, Lesotho, Malawi, Seychelles, South Africa, Tanzania, Uganda and Zambia. Among the officials presiding over the third Africa Savings and Cooperatives Regulators’ Roundtable were (from left) Perks Ligoya, governor of the Reserve Bank of Malawi; World Council of Credit Unions Director Sylvester Kadzola, CEO of Malawi Union of Savings and Cooperatives; JoAnne Ferguson, Canadian Co-operative Association senior director of International development; Mary Nkosi, deputy governor of the Reserve Bank; and Dave Grace, WOCCU vice president of association services. (Photos provided by WOCCU.)African credit unions provide financial services to more than 15.5 million members. The credit unions, often located in rural areas, are experiencing 20% to 50% annual asset growth as they help move families from poverty to middle class. Such rapid growth creates a greater need for strong but appropriate prudential oversight, conference organizers said. “These roundtables have become a catalyst to accelerate regulatory developments on our continent,” said WOCCU Director Sylvester Kadzola, CEO of Malawi Union of Savings and Credit Cooperatives (MUSCCO), the country's credit union trade group. He said the roundtable marked a significant step forward for the movement. Following the framework of the recent Caribbean Regulators’ Roundtable co-hosted by WOCCU and the International Monetary Fund, the Malawi program offered guidance and advice on technical tools, applied training through case studies, and shared experiences of supervisory and legislative developments within Africa. As part of the roundtable activities, participants visited MUSCCO headquarters and a credit union operating in Malawi’s capital of Lilongwe.
Click to view larger imageAmong the officials presiding over the third Africa Savings and Cooperatives Regulators’ Roundtable were (from left) Perks Ligoya, governor of the Reserve Bank of Malawi; World Council of Credit Unions Director Sylvester Kadzola, CEO of Malawi Union of Savings and Cooperatives; JoAnne Ferguson, Canadian Co-operative Association senior director of International development; Mary Nkosi, deputy governor of the Reserve Bank; and Dave Grace, WOCCU vice president of association services. (Photos provided by WOCCU.)
Mary Nkosi, deputy governor of the Reserve Bank of Malawi, opened the program and later in the week joined Perks Ligoya, governor of the Reserve Bank, to meet with officials from WOCCU, MUSCCO and CCA to discuss pending credit union legislation. WOCCU drafted the new legislation in 2007, but it was approved only recently by the government’s cabinet. Before moving the legislation on to Malawi's parliament, Reserve Bank officials agreed to review provisions of the law that concerned the credit union sector. “While there is now broad acceptance of the need for prudential oversight of credit union activities in Africa, finding the right regulatory balance is especially challenging in small countries with many credit unions,” said Dave Grace, WOCCU vice president of association services, who oversaw last week’s roundtable. “There is no silver bullet. But we’re seeing a variety of innovative approaches that hold promise, and we're committed to working with those in the region on these developments.”
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