Development Firms Note the Value of Credit Union Difference

Strength of Sustainability Embraced by More Individuals, WOCCU Chairman Notes

November 14, 2008

Organization: World Council of Credit Unions
Phone: (608) 395-2000

BELIZE CITY, Belize—When World Council of Credit Unions (WOCCU) Chairman Melvin Edwards talks about agricultural lending, he draws a distinct connection to the additional value credit unions bring to the process. Edwards observes more people are taking notice and asking questions about the strength through sustainability that credit unions bring to any development equation.

WOCCU Chairman Melvin Edwards

During last week's presentation to the Technical Centre for Agricultural and Rural Cooperation ACP-EU, a Netherlands-based agency for improving the flow of stakeholder information among rural development efforts in Africa, the Caribbean and the Pacific, Edwards described WOCCU's approach to value chain financing in Peru, as well as several other countries. Those efforts caught the attention of participants attending the Belize workshops, as they learned about the sustainability credit unions offer participants, something critical to effecting long-term change, but often unavailable through other development agencies.

"WOCCU agricultural lending efforts have stressed value chain financing, capacity building and improving delivery mechanisms," said Edwards, who represents the Caribbean Confederation of Credit Unions on WOCCU's board of directors. "Not all questions of success and accessibility have been answered, but WOCCU's sustainable approach helps credit unions worldwide deliver financial services to people in rural markets who need them most."

Value chain financing provides funding for participants in the field-to-market process to streamline the process between the time a crop is planted and harvested, when it reaches the market and is sold to the final end-user, and earnings from the sale are returned to the producers after the credit union loans have been satisfied. Introduced in credit unions by WOCCU in Peru, the process is now being successfully adapted to serve the needs of small producers in Kenya and other countries around the world.
"By becoming credit union members as part of the value chain process, small producers solidify business relationships and gain market access, not only for the duration of the value chain cycle, but for the foreseeable future," Edwards told Belize participants. "WOCCU's methodology enables credit unions to identify at which point in the value chain, from production to commercialization, financing brings producers the best value and represents a good investment for the institution."

Value chain financing has taken on different characteristics in the various countries in adapting to the local environment. For example, in Kenya, small producers, farmers' groups and product buyers are brought together at the start, cutting out the need for middlemen, thus returning to producers more profits from crop sales.

"No matter how formal the structure, credit union involvement in agricultural development and lending at all levels provides greater sustainability for those involved in the process," Edwards said. "More and more small producers in developing nations worldwide are seeing greater benefits from the credit union difference."

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 300+ technical assistance programs in 89 countries. Worldwide, 68,882 credit unions in 109 countries serve 235 million people. Learn more about World Council's impact around the world at

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