WOCCU Announces Two New Projects
October 26, 2005
Madison, WI – World Council of Credit Unions, Inc. (WOCCU) announces two new projects. The first, located in Sri Lanka, will focus on Credit Union Finance Facility restructuring and is funded by a donation from the United States Department of Agriculture (USDA), under a Food for Progress Program. The second, located in the Philippines, will focus on Strengthening the Philippine Model Credit Union Network by developing a private deposit insurance facility. It is funded by a grant from the United States Agency for International Development (USAID).
For the Sri Lanka project, USDA will donate 17,780 metric tons of wheat. The proceeds from the sale of this wheat, approximately 2.7 million dollars, will be used to implement this three year credit union development program. Under this program WOCCU will restructure participating Sri Lankan financial institutions by drafting and implementing policies and procedures with special attention to loan administration; installing accounting software; providing on site professional development training; and developing financial management capacity in Sri Lanka. WOCCU will also recapitalize at least four financial institutions and support the rehabilitation of credit unions by working with and providing oversight to SANASA/Institutional Development Unit to improve its performance.
The three-year, $3.6 million Philippine project will run from December 2005 to November of 2008. WOCCU and its partner credit unions have established the Model Cooperative Network Federation (MCN) in order to partially substitute for the absence of fully functional credit union legislation, and a safety net. The MCN Federation Model is one based on a 2nd tier structure with a network of affiliated, autonomous and financially independent, "branch banking" credit unions. The unique feature of this model is that membership is combined with a privately administered formal insurance program that involves the principles of self-regulation and mutual liability. In other words, the entire capital of the network would be available to cover losses from insolvencies. The mutual liability provides the incentive for member credit unions to ensure that there is adequate and timely regulation and enforcement.
The broad development goal of the project is to establish a "private" legislative framework and deposit insurance through further strengthening of the MCN. The ultimate success of the MCN will depend on its ability it achieve operational and financial sustainability without continued external subsidy.
"We are very excited about the possibilities this new funding creates," said WOCCU's CEO Pete Crear. "The legislation developed in the new Philippines project will be critical to the uniform regulation and financial survival of cooperatives in the area. Likewise, the Sri Lanka project will be critical to the continued strengthening of Sri Lanka's post-tsunami economy." WOCCU has worked extensively in these countries in the past, both of which have been sites of former WOCCU projects.
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, 60,657 credit unions in 109 countries serve 223,000,000 people. Learn more about World Council's impact around the world at www.woccu.org.