The Landscape thru WOCCU’s eyes
Barry LennonWorld Council of Credit Unions (WOCCU)
April 10, 2007
COOPERATIVE FINANCE
Financial CooperativesFinancial Cooperatives
1.Changes in the markets we serve;
2. Innovations in products and services; and
3.Market opportunities and challenges.
OPPORTUNITIES AND CHALLENGESOPPORTUNITIES AND CHALLENGES
PREDICTIONS IN 2001PREDICTIONS IN 2001
1) More research and attempts to reach poorer clients
2) Greater mix of client responsive services
3) Differences between Microfinance and Consumer finance will blur
4) Renewed interest in ag & rural finance
5) More flexible lending for non-enterprise finance (housing, consumption, etc.)
6) Progress offering savings services for the poor
7) More payment services and use of technology
8) The credit union “star” may rise again
Kate McKee, USAID
INTERNATIONAL PROGRAMSINTERNATIONAL PROGRAMS
Davao, Philippines
Nairobi, Kenya
Tashkent, Uzbekistan
Cochabamba, Bolivia
Bogota, Colombia
Guatemala –Reg Manual
Veracruz, MexicoLeon, CPM Mexico
Michoacan, Mexico
Coop Development Program
Bansefi, Mexico
Quito, Ecuador
Colombo, Sri Lanka
Lima, Peru
Kigali, RwandaKampala, Uganda
Battambang, Cambodia
Afghanistan
13 countries
196 financial coops
3.8 million clients
WOCCU’s program agendaWOCCU’s program agenda
• Increasing scale and depth of CU services Shared branching IT solutions
• Greater rural outreach• Value chain finance & linkages • Leasing
• Remittances & linked products• Special populations (HIV AIDS, youth & IDPs) • Private service providers for CU’s• Regulation and supervision (regulation & supervision)• Working in conflict & Islamic finance• Wholesale lending (housing & SME’s)
1.1. Changes in the Market we Changes in the Market we serveserve
• More post-conflict opportunities
• Push to deepen and broaden markets
(HIV AIDS, youth, rural households & extreme poor)
• Greater risk of local government intervention
(caps on interest rates; inappropriate regulation and supervision;
reentry of public development banks)
• Greater sophistication of demand (more variety)
• Weak donor support for cooperatives
2.2. Product & serviceProduct & serviceinnovationsinnovations
• Remittance transfers & linked products
• Value chain finance & leasing
• Shared branching & ATMs
• Remote technology devices (POS)
• Reaching scale and hard-to-reach clients HIV AIDS affected households The extreme poor
• Islamic banking
Remittances Remittances via IRvia IRnetnet
Year # of transactions Value (US$) AVG
2001 5,873 $4,026,639 $686
2002 113,177 $53,270,705 $471
2003 433,609 $196,305,809 $453
2004 762,881 $333,157,822 $437
2005 950,891 $396,054,037 $417
2006 1,242,660 $494,358,048 $398
Totals: 3,509,091 $1.48 billion $421
8 COUNTRIES8 COUNTRIES
Shared branching Shared branching networksnetworks Bolivia
• Rural Branches
• Central Corporate
• Shared Branching
Ecuador
• Shared Branching
• Debit Cards
• Point of Sale
Shared branchingShared branching
Redcoop CU
CU
CU
CU
CU
CU
CU
CU
BBBB
B
B
B
B
BB
B
B
B
B
B
B
BB
B B
B
B
B
B
Guatemala
Ecuador
Bolivia
ATM expansion planATM expansion plan
Credit Union
$1.00 per transaction
$0.50 per transaction
$0.35 per transaction
Partnership programPartnership program
1. Bahamas / Massachusetts 2. Barbados / Missouri 3. Bolivia / Ohio 4. Costa Rica / Alabama5. Ecuador / Colorado6. Georgia / Poland 7. Hong Kong / British
Columbia8. Jamaica / Texas9. Kenya / Pennsylvania10. Macedonia / Michigan11. Mexico Alianza / New
Mexico
12. Mexico CPM / California & Texas
13. Mexico Libertad /Arizona14. Nicaragua / Washington DC15. Panama / Iowa16. Paraguay / Minnesota17. Philippines / Washington18. Puerto Rico / New York19. Rwanda / Maine20. Suriname / North Carolina21. Trinidad / Connecticut22. Uzbekistan / Oregon
3. Opportunities and Challenges3. Opportunities and Challenges
• Governance (ACCEPTING CHANGE / AVOIDING BACKSLIDING)
• Actual reform process of existing cooperative systems (TIME & RESOURCES)
• Staff training
• Appropriate products
• Cost effective delivery systems (TECHNOLOGY
SOLUTIONS)
• Greater sharing of skills & experience
• Greater donor support
ONLY USE FOLLOWING ONLY USE FOLLOWING SLIDES IF THERE’S TIME SLIDES IF THERE’S TIME REMAININGREMAINING
Distribution of DepositsDistribution of Deposits
$ 0 - $300 $300 - 500$501 - 1,000
$1,001 + TOTAL
# Savers 300,071 19,561 22,640 33,735 376,007
% total 80% 5% 6% 9% 100%
Total savings ($ millions) $13.5 $7.7 $16.0 $152.7 $189.9
% total 7% 4% 8% 80% 100%
AVG $45 $394 $707 $4,526 $505
11 credit unions (Dec 06)
Distribution of LoansDistribution of Loans
LOAN PURPOSENUMBER OF
BORROWERS % BALANCE OUTSTANDING %
Agriculture 2,650 3% $4.3 MILLION 2%
Housing 8,643 11% $37.4 MILLION 19%
Microenterprise 26,681 34% $68.5 MILLION 35%
Commerce 5,797 7% $13.9 MILLION 7%
Consumption 34,476 44% $72.6 MILLION 37%
Other 823 1% $636,327 0%
TOTAL 79,070 100% $197.4 MILLION 100%
11 credit unions (Dec 06)