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WOCCUs rural lending project aides Guatemala farmers
JALAPA, Guatemala (2/16/12)--Guatemala's  farmers are experiencing greater financial stability with their credit unions' support through a pilot program implemented by World Council of Credit Unions (WOCCU) in partnership with its Guatemalan member association.

Brian Branch, president/CEO of World Council of Credit Unions (WOCCU) (left), talks with Cooperativa (credit union) Tonantel CEO Elio Armando (center), and Guatemalan WOCCU member Federación de Nacional de Cooperativas de Ahorro y Crédito CEO Oswaldo Oliva about the credit union's expansion into rural agricultural lending. 
Federación de Nacional de Cooperativas de Ahorro y Crédito (FENACOAC) is the WOCCU Guatemalan member association.

The five-year Cooperative Development Program (CDP), also operating in Mexico, is supported by US$4 million in funding from the U.S. Agency for International Development. The program, which runs through 2015, focuses on creating and testing agricultural and financial tools to improve rural economic and financial sector development, personal income and food security.

Program results will include a scalable methodology to increase small farmers' access to markets, inputs and technical assistance. Participating farmers are expected to increase production, improve their livelihoods and offer better financial support to their communities.

"The CDP program at work both here and in Mexico combines new methodologies and technological delivery of financial services to help small Latin American farmers succeed," said WOCCU President/CEO Brian Branch, who led a delegation to both countries last week to evaluate the pilot program's progress since it began in 2010. "With FENACOAC's assistance, we can more effectively help Guatemalan credit unions implement the program among their rural members."

Guatemalan farmer Ángel María Najera Vicente describes how the production of French beans (in background) provides a good return because he and other farmers in his group can use loans from Cooperativa (credit union) Tonantel to cover costs for inputs, labor and maintenance. (Photos provided by the World Council of Credit Unions)
WOCCU and FENACOAC are conducting the program through four credit unions. Cooperativa Tonantel, a credit union located in Guatemala's Jalapa region, is already realizing the benefits of investing in the rural economy, said WOCCU. Tonantel last year added agricultural lending to its portfolio and lowered its interest rates on loans. Membership has since grown by 30% to 70,000 members, and loan delinquency now stands at 1%.

Part of the growth has to do with Tonantel's mobile technology strategies, which involve equipping an on-staff agronomist with a laptop computer, wireless network card and mobile printer to provide financial services to the farmers in their homes and in the fields where they work.

The credit union also is piloting relationships with 18 agent-banking outlets located within local member businesses. The businesses effectively operate as credit union branches, offering member enrollment, deposit withdrawal, bill payment and other services through a designated laptop. Transactions through these remote sites total nearly 400 per month, or about 22 per location.

Low-interest credit union loans also allow farmers to comply with sound agricultural practices that assure greater integrity of the products produced and fewer detrimental environmental impacts from farming operations, WOCCU said. Farmers in Mexico who participate in the CDP program are learning to produce organic coffee in environmentally sustainable ways, which will likely earn higher market prices. Participating Guatemalan farmers are seeking similar results.

"The CDP program helps farmers operate more effectively and in ways that offer good economic outcomes and positive environmental impacts," Branch said. "We believe the success of this model can be put to effective use in other developing countries."

To learn more about the visit at Branch's blog, use the link. For more information about World Council's CDP program, use the link.
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