The World Council of Credit Unions will develop a five-year cooperative development program to meet the financial service needs of small farmers in Guatemala, Mexico and Kenya.
The U.S. Agency for International Development awarded WOCCU $4 million to implement the project, which will create a toolbox for credit unions that will include methodology to increase rural farmers' access to markets, inputs and technical assistance for production.
Credit unions face a number of challenges serving rural areas, where dispersed populations rely on variable income, limited or no financial services and inadequate market information. Credit unions often struggle to develop and deliver appropriate 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.
Recommended For You
"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 operation 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 bring together financial and agricultural technical services and employ information technology 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, the World Council said.
WOCCU will draw on its 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 CDP, WOCCU will work with credit unions in Guatemala and Mexico to create and document the use of new financial products, services and delivery mechanisms. Credit unions in Kenya will implement the methodology in the final three years of the program to test whether it can be replicated.
WOCCU has participated in USAID's CDP in varying capacities 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 and piloted a credit union remittance outreach program in the United States.
Throughout the current five-year program, WOCCU will collaborate with cooperative development organizations and share lessons learned and achievements with the finance community.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.