WOCCU-Bolivia Brings Financial Services to Rural Areas
Shoeshine boys deposit their earnings into new youth savings accounts at CACTRI, Ltda., in San Borja, Bolivia.
Madison, WI—The Bolivian credit union
sector boasts eight new rural credit union
branches, a shared branching network with 64
points of service, remittance distribution and
several new savings and credit products thanks
to the success of World Council
of Credit Unions' (WOCCU) Rural Credit Union
Growth Program, funded by the United States
Agency for International Development (USAID) in
La Paz. The four-year program, which ended in
December 2006, built on the foundation of past
WOCCU-USAID projects in Bolivia.
Though the microfinance industry is robust in
Bolivia's urban centers, more than one-third of
the population lives in isolated or hard-to-
reach rural areas and has few to no options for
accessing financial services. In WOCCU-Bolivia's
initial market study to determine potential
locations for rural branches, 86-95% of survey
respondents in these areas expressed the need
for basic financial services such as credit,
savings, remittances and domestic transfers.
The small village of Entrerios, home to Magisterio Rural Credit Union, lies isolated among the Andes mountains in southern Bolivia.
For years, the credit union sector lacked
financial discipline to build a sustainable
foundation and strategy to reach rural areas.
Credit unions were at a low level of lending,
had a high percentage of non-productive assets,
weak institutional capital and a low profit
index. Delinquency rates averaged 40%, and
insufficient to protect against potential
"We looked at the system and saw that credit
union executives and directors were deciding the
direction of their credit unions without
considering their members' needs," explained
Julio Fernández, former WOCCU-Bolivia project
director. "While working to solidify the
sector's financial viability, we also helped
credit unions develop a new way of packaging,
promoting and selling financial services."
Through an innovative shared branching and
remittances network called "ServiRed," members
in rural areas can now conveniently access safe
and sound International Remittance Network
(IRnet®) services, savings
accounts and loans in
their own communities. The network unites 19
credit unions supervised by the financial sector
regulator in Bolivia through 64 points of
service across the country. Corporate One Credit
Union in Ohio (US) lent its extensive
information technology expertise to help
establish the network, which operates on
broadband and dial-up Internet connection.
The financial discipline among credit union
management has improved considerably in four
years. Bolivian credit unions participating in
World Council's program reduced delinquency to a
consistent average of 5%. Competitive interest
rates have also attracted more members.
Agriculture credit, payroll credit,
microbusiness loans and housing
loans now represent approximately 70% of total
assets, and annual profits allow for a high
level of solvency to be maintained. The total
amount of savings has increased nearly five
times since the outset of the program in
Once financial management was brought into
eight credit unions established and strengthened
eight corresponding rural branches in a co-
financing scheme with WOCCU-Bolivia. The
branches currently serve over 6,000 members in
remote areas with a savings volume of $3.1
million and a loan volume in excess of $4.5
Credit unions now form one of the largest
financial networks in the country. Today the 23
credit unions supervised by Bolivia's financial
sector regulator have a combined savings of $250
million and $231 million in loans.
World Council's fifth
project in Bolivia, funded by USAID, began
in September 2006. In addition to expanding upon
the growth of the prior program, the new project
will focus on uniting and strengthening
Bolivia's microfinance sector to foster
cooperation and growth in underserved areas.
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, 60,500 credit unions in 109 countries serve 223 million people. Learn more about World Council's impact around the world at www.woccu.org.
Phone: (608) 395-2000