Adapting to the Challenges of Changing Financial Paradigms WOCCU's Savings Mobilization Programs in Latin America
This paper presents the savings methodology employed by the World Council of Credit Unions, Inc. (WOCCU) in its Latin America programs.
The author presents that credit unions combine financial discipline with demand driven products and their aggressive outreach generates stable financing to meet credit service demands. He adds that the credit unions in Latin America have failed these expectations, and WOCCU has developed a ten point component Model Credit Union Methodology to address this. This is carried out in three phases of development till the credit union attains an excellent image.
The WOCCU methodology is based on 'protection before mobilizing of savings'. It also gives importance to infrastructure improvements, marketing initiatives and professional capacity building.
The paper states that credit unions mobilize savings for three principal reasons:
- Cost of funds is cheaper;
- It is self sustaining financing, with significant freedom from donor requirements;
- It helps in maintaining balanced governance.
As per the author, on the basis of surveys, WOCCU feels that savers seek safety, convenience and return. To address this, it builds credit unions and a range of safety measures and products. WOCCU also encourages innovations to meet the changing member needs. Most credit union innovations occur in service delivery. Some of these are:
- Central Service Organization Network;
- Branching;
- Village Banks;
- Agricultural Salary Product.
The author suggests that donors can also contribute by supporting:
- Institutional strengthening programs;
- Innovations;
- Development of the second-tier entities of the new model CSO;
- Enabling regulatory and supervisory environments.
