China Invites WOCCU to Develop Credit Union Model for Rural Institutions
Crear, Branch and Swoboda met with regulators and RCC executives in Guizhou Province. (l-r): Crear, Ruibin Zhang, PBOC researcher who worked with Swoboda on the initial RCC assessment, and Branch.
Madison, WI—Chinese government
and regulators invited World Council of Credit
Unions (WOCCU) to spearhead rural credit
cooperative (RCC) reform in one of the poorest
provinces of China during WOCCU's recent visit
to the country.
In an effort to catalyze development in rural
areas where financial access is limited and
usurious lending is rampant, the Chinese
government established a legal framework to
allow for the existence of credit unions at the
end of 2006. On World Council's second visit to
China, Pete Crear, CEO, Brian Branch, chief
operating officer and Ralph Swoboda, WOCCU's
consultant on China, spent a week with
government officials, RCC representatives and
regulators from the People's Bank of China
(PBOC) and the China Regulatory Banking
Commission (CRBC) to begin planning RCC reform
in the southwest Guizhou Province—one of the
poorest and least developed in China.
A family poses at one of more than 600 greenhouses in the area made possible through a loan from their RCC.
The Chinese government has identified RCCs as
prime vehicles for providing affordable
financial access to small-scale entrepreneurs
and consumers, but RCCs have long struggled with
an unclear ownership structure, poor governance
and erratic financial performance. The group
discussed WOCCU's potential to provide technical
assistance and training to strengthen and reform
the operations of the RCCs.
"The baseline assessment revealed a need for
staff training and development of best practices
in governance and lending, as well as
information technology upgrades," explained
Branch. "Within the next couple of months, we
will conduct a more in-depth study to identify
key technical needs and map a reform strategy
for the RCCs in China."
Branch and Swoboda will also lead a study
of 14 WOCCU Supporters and board members to
China in June. During the trip, credit union
CEOs from the United States and Canada will
study the RCC system and provide initial
training on model credit union building.
All-China Federation of Trade Unions (ACFTU),
China's only national trade union federation and
the largest trade union in the world, has also
sought World Council's assistance in a separate
initiative to form a credit union for its 134
million members. ACFTU is a voluntary trade
union that represents more than 1.7 million
primary trade union organizations of China's
"The preliminary talks with ACFTU have been
promising," Crear noted. "And with nearly 150
million members, the formation of an ACFTU
credit union would nearly double total
union membership throughout the world."
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, 56,000 credit unions in 101 countries serve 200 million people. Learn more about World Council's impact around the world at www.woccu.org.