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USAID awards WOCCU 4M for agrural finance outreach
MADISON, Wis. (10/5/10)--The U.S. Agency for International Development (USAID) awarded World Council of Credit Unions (WOCCU) $4 million to implement a five-year Cooperative Development Program (CDP) with credit unions in Guatemala, Mexico and Kenya.
Click to view larger image The Cooperative Development Program will expand upon the World Council of Credit Unions’ (WOCCU) credit union outreach methodologies, including Semilla Cooperativa, developed by WOCCU’s rural finance program in Mexico. Credit union field officers there use personal digital assistants to provide financial services in members’ communities. (Photo provided by the World Council of Credit Unions)
The program will focus on creating and testing agricultural and financial tools to improve rural economic and financial sector development, livelihoods and food security. The resulting “toolbox” for credit unions will include a replicable and scalable methodology to meet the financial service needs of small farmers and agribusinesses, and increase their access to markets, inputs and technical assistance for production. Credit unions face challenges serving rural areas, where dispersed populations rely on extremely variable income, limited or no financial services and inadequate market information, WOCCU said. Credit unions often struggle to develop and deliver appropriate, high-quality products and services for farmers and rural entrepreneurs while keeping transaction costs low and maintaining an economic margin. At the same time, legal, regulatory and policy frameworks can prohibit product development and certain forms of outreach. Without the proper tools to grow, agricultural and agribusiness development has remained stagnant in many rural farming communities, WOCCU added. “Credit is a crucial component to increasing the income of rural producers, but credit alone does not always solve economic problems,” said Brian Branch, WOCCU executive vice president and chief operating officer. “With the CDP program, we apply an innovative approach that addresses both the financial needs and market barriers for rural producers in a more integrated way than we and other development organizations have previously tried.” WOCCU’s program will join financial and agricultural technical services and employ information technology (IT) outreach solutions to stimulate rural economic growth. The technology-based delivery systems and new agricultural products developed through CDP will enable small producers to smooth their incomes and increase production. WOCCU will draw on its value-chain finance experience in Peru, rural finance approach in Mexico and IT-based delivery systems in Colombia, Guatemala, Kenya, Mexico and Rwanda to develop the toolbox. During the first two years of the program, WOCCU will work with credit unions in Guatemala and Mexico to create and document the use of new financial products, services and delivery mechanisms for value chains and rural producers. Credit unions in Kenya will implement the methodology in the final three years of the program to test its replicability. WOCCU has participated in USAID’s CDP for 30 years. In recent years, WOCCU’s CDP developed the first Model Regulations for Credit Unions, supported the launch of a U.S.-Ecuador international shared branching network in collaboration with WOCCU’s USAID-funded development program in Ecuador, piloted a credit union remittance outreach program in the U.S. and implemented an HIV/AIDS peer training program through a teachers’ credit union in Kenya. Throughout the current five-year program, WOCCU will collaborate with partner cooperative development organizations and share lessons learned and achievements with the broader development finance community.
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