A Technical Guide to Mainstreaming: The Credit Union Perspective

This paper is a technical note from WOCCU (World Council of Credit Unions, Inc). It:

• Deliberates on the importance of 'mainstreaming' the financial services and 'scaling up' the same for successful inclusion of poor people in the financial sector.
• Argues that the separation of microfinance from other financial services limits the potential of credit institutions to reach the poor.
• Draws examples from various new initiatives undertaken by WOCCU's member credit unions across the world to represent the prevailing thought on mainstreaming the financial services for the poor.

The paper states that a wide range of strategies are implemented by WOCCU and its affiliated credit unions to mainstream services and scale up to integrate mass numbers of poor people into the financial sector. These include:

• Extension of branch coverage and harnessing of appropriate technology;
• Client responses services and distinct products for downreach;
• Development efforts focusing both at the field and at the policy levels.

Drawing lessons from the initiatives undertaken by credit unions to incorporate microfinance into the mainstream financial sector, the paper concludes the required institutional characteristics for successful mainstreaming:

• Adherence to strict financial discipline;
• Mixed outreach client base;
• Primary source of funds - member client savings;
• Robust capital base.