6th Annual African Congress a Success!
African Credit Unions Face More Supervision and Regulation Issues
October 19, 2005
Madison, WI - World Council of Credit Unions, Inc. (WOCCU) co-hosted the 6th annual African Congress along with Canadian Co-operative Association (CCA), the Irish League of Credit Unions International Development Foundation (ILCU Foundation), and the Unions des Banques Populaires du Rwanda (UBPR). Over 280 credit union leaders from 14 countries met in Kigali, Rwanda to discuss issues affecting different regions and credit union movements in Africa. The theme of this year's Congress was "For the safety of your savings."
The Congress gathers representatives of savings and credit cooperatives (known as SACCOs in some African countries) on a yearly basis to exchange ideas and perspectives. This year's panel discussion focused on "Differences in SACCO Ways of Operating Across Africa". It was uniformly recognized that credit unions throughout Africa are facing increased regulation issues. Given the important volume of savings mobilized by credit unions, regulation has become even more critical in order to safeguard members' savings and protect the increasing number of small depositors.
Eight West African countries are governed by the PARMEC law. However, supervision is not always effective because of inadequate training and limited resources. Other countries, like Kenya, are close to enacting a credit union law, while many other countries are still relying on a generic microfinance law. It is the SACCO's similarities as well as differences that make the annual Congress an increasingly relevant event for credit union movements in Africa.
Throughout sub-Saharan Africa, credit unions represent at least 70% of the whole microfinance sector in many countries. These institutions are increasingly facing stiff competition from other non-bank financial institutions and even from commercial banks that are downscaling their operations to reach lower income people.
Participants at the 2005 Africa congress commonly agreed that there is a need for more training in and implementation of tools that will help them adapt to the changing environment. The African Congress strives to bring partial answers to meet the increasing demands and expectations of its participants.
"This year's congress is yet another strong indication of the increasing training needs of credit union staff and volunteers in Africa." says Erick Sile, WOCCU's technical officer for Africa and a key organizer of and speaker at the event. "The difference in credit union ways of operating across the continent is widening, thus emphasizing the importance of such a venue that favors exchange of ideas and exposure to best practices in credit union management"
Pete Crear praised African SACCOs during his opening remarks. "We have many success stories from this region, like Kenya where SACCOs are very large in their representation of the population." WOCCU's CEO went on to praise Rwanda specifically as it has emerged from a horrible civil war 10 years ago that claimed over 800,000 lives. "Rwanda also continues to grow and come back from the dark years. Credit unions are leading the way, helping members rebuild their lives!"
Also speaking at the opening was Rwandan Prime Minister Bernard Makuza, who noted that cooperatives are efficient instruments in the reduction of poverty in Africa. "It is high time the masses pool their resources together and share experiences with others on the management of cooperatives in a bid to foster economic development in their respective countries. It is through mobilization and savings that economic development can be realized," Makuza told the delegates.
As credit unions grow or extend their outreach to more undeserved areas, it is important to design demand-driven products. It is in light of this spirit that Chet Aeschliman, a representative of the Food and Agriculture Organization of the United Nations made a presentation on micro-credit technologies for African credit unions.
Rwanda's credit union movement is stronger today in part due to the 4-year project WOCCU just completed there, which targeted 17 pilot credit unions. A post-project survey of the participating credit unions showed asset growth of 169%, membership growth of 65% and a healthy solvency ratio.
Attendees at this year's African Congress participated in informative lectures and workshops facilitated by credit union leaders from around the world including WOCCU vice president Brian Branch; Credit Union Central of Canada CEO Joanne De Laurentiis; Vantage Credit Union president Hubert Hoosman; Verity Credit Union Board Member Kelly Sandy; CCA's senior director of international development Jo- Anne Ferguson; Tommy Weir, representative of the ILCU Foundation; and UBPR CEO Bernard Itangishaka, among others.
World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 60,500 credit unions in 109 countries serve 223 million people. Learn more about World Council's impact around the world at www.woccu.org.