New Practices Hurt Credit Union Development, WOCCU Tells Congress
Plank and other participants listen to testimonial by Morduch. (Photo provided by CUNA)
Washington, D.C. – World Council of Credit Unions,
Inc. (WOCCU) Chairman Gary Plank testified before
a House International Relations subcommittee in DC
this afternoon, telling the assembled Members of
Congress that despite WOCCU's strong track record
in the delivery of microfinance technical
assistance, new project funding by the U.S.
government has been drastically affected by recent
trends to use massive contracts rather than
competing work through cooperative agreements and
grants to small, specialized agencies like WOCCU.
The hearing before the House International
Relations Subcommittee on Africa, Global Human
Rights and International Operations was called to
evaluate the implementation of the Microenterprise
Results and Accountability Act of 2004, last
year's reauthorization legislation that aimed to
offer niche practitioners like WOCCU the ability
to better compete for microfinance development
work funded by the U.S. Agency for International
Development (USAID), the U.S. government's foreign
assistance arm. Also testifying were James T.
Smith, USAID assistant administrator; New York
University associate professor of public policy
and economics Jonathan Morduch, Ph.D; Susy
Cheston, senior vice president for Opportunity
International; and Lawrence Yanovitch, director of
policy and technical assistance for the Foundation
for International Community Assistance.
"Credit unions are in the business of helping
people help themselves to improve their lives,"
Plank testified on behalf of WOCCU, the Credit
Union National Association (CUNA) and the Arizona
Credit Union System, where he is president and
CEO. "As a leading source of microenterprise
funding, credit unions have helped thousands in
the developing world start small businesses and
learn important self-support skills."
(l-r) Mica, Smith and Plank. (Photo provided by CUNA)
WOCCU is currently carrying out 15 multi-year
country programs, nine of which are funded by
USAID. Credit unions supported by these programs
serve 3.1 million members and have mobilized $3.9
billion in savings to fund
more than $3.6 billion in loans.
"USAID now funds broad umbrella programs that
attempt to work across the financial sector with
general training provided by contractors and their
consultants. The breadth of the activities
bundled into one large contract ... essentially
preclude[s] small specialized firms from being
able to viably compete as prime implementers for
large contracts," said Plank.
Plank explained to the subcommittee that the U.S.
credit union movement is directly engaged in many
of WOCCU's projects through WOCCU's International
Partnership Program. There are 18 partnerships
between state credit union leagues and credit
union movements in developing countries, said
Plank, and many of the partnership stem from WOCCU
programs funded through USAID cooperative
agreements, and continue with the financial and
personal support of the U.S. credit unions and
"From my vantage point as a U.S. credit union
leader, it is clear to me that as the use of large
contracts increases, USAID loses the added benefit
of the U.S. credit union movement's volunteer
service to enhance the productivity and outreach
of microfinance," said Plank.
"CUNA and WOCCU implore Congress to recognize the
fundamental changes that must be made in USAID
procurement practices and capacity to reverse the
trend of issuing large contracts and impeding the
ability of smaller, not-for-profit firms to
compete for funding," he said.
To view Plank's testimony in full, click here.
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, 51,000 credit unions in 100 countries serve 196 million people. Learn more about World Council's impact around the world at www.woccu.org.