The United States Agency for International Development (USAID) recently awarded World Council of Credit Unions, Inc. (WOCCU) $1.3 million to implement its three-year "Peru Credit Union Market Integration Program" in rural Peru.
World Council's first project in Peru aims to expand credit union outreach to the rural poor with market-driven financial services and products, including savings, credit and remittance products and shared branching. The program will also facilitate market relationships between member producers, traders and merchants through "value chains." WOCCU has helped forge similar business relationships in its ongoing Nicaragua project, and the project in Peru proposes an even larger network.
According to the Peru National Institute of Statistics and Information, one of every four Peruvians and more than half of the rural population live in "extreme poverty." Many rural poor in Peru are prevented from economic growth not only because financial services are out of reach but because they are isolated from business markets and current market information.
"Increasing the level of income in poor regions cannot be isolated to sales; it must be tied to the market," said Mark Cifuentes, World Council senior manager of Latin America, Caribbean and Africa technical services. "So while it's important for us to facilitate the process to increase potential income, we also need to decrease the risk to individual producers. It's better for us to work collectively to sell rather than have individuals seek out their own markets."
World Council selected two credit unions affiliated with Peru's national credit union federation, Federación Nacional de Cooperativas de Ahorro y Crédito del Perú (FENACREP), in each of four low-income areas of the country to participate in the project. Members of the eight rural credit unions are heavily involved in rural production and trading. Shared branching and networking among these credit unions and merchant-based credit unions in Lima will help connect members to fair trading opportunities.
Luis Jimenez, former director of the WOCCU- Ecuador CGAP project, will manage the project in Peru.
"My hope as project director is to replicate the experiences and successful achievements of World Council to the Peruvian environment, adapting and creating financial products with a social focus and raising the financial strength of credit unions," Jimenez said. "In Peru, it's a long road to travel in repositioning the cooperative system, which is why the Peru project aims to plant seeds to establish a foundation for future efforts and initiatives."
World Council and its member FENACREP will cost share 20% of the funding for the Peru project. USAID's Microenterprise Development office oversees the competitive Implementation Grant Program (IGP) funding the bulk of WOCCU's Peru project. USAID administers the United States foreign assistance program providing economic and humanitarian assistance in more than 80 countries worldwide.
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.