Madison, WI—Credit unions were recognized in Business Week Magazine this week for their role as a remittance provider and their effectiveness of reaching out to the unbanked population. The article, Channeling the Remittance Flood, quoted industry expert, Manuel Orozco, executive director of the Remittances & Rural Development project at the Inter-American Dialogue, a think tank based in Washington, D.C. Orozco noted, "Today, fewer than 10% of remittance recipients have bank accounts, largely because traditional banks haven't been interested in small clients. That will change as more remittances are channeled into credit unions and microfinance organizations."
"Credit unions were often started to serve people that lacked financial services, World Council's International Remittance Network (IRnet) opens another door for credit unions to do just that, by providing affordable reliable remittances," noted Tiffany Kultgen, World Council, IRnet Officer. "Credit unions have the opportunity to reach out to the unbanked population and can help both remittance receivers and senders become part of a formal financial institution and receive education on credit and savings products."
Kultgen cited a World Council remittance study conducted in Guatemala that showed 74% of member recipients have been members of their credit union for less than three years (remittances distribution began in 2001) and forty percent of members named remittance services as the primary reason for having joined the credit union.
She continued, "Remittances will continue to play a key role in credit union development. Our goal is to develop remittance linked savings and credit products in developing countries to further build on the success we've already had."
In 2005 credit unions originating or receiving remittances as part of World Council's IRnet program sent over $381.6 million and since the program's inception IRnet remitters have sent $943.6 million.
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, 57,000 credit unions in 105 countries serve 217 million people. Learn more about World Council's impact around the world at www.woccu.org.