LA PAZ, Bolivia — In an effort to engage Bolivia's entire financial sector and extend services to marginalized rural areas, World Council of Credit Unions' (WOCCU) development program set out in 2006 to administer grants to credit unions and microfinance institutions that piloted innovative outreach initiatives. The three-year-plus financial sector support program, funded by the U.S. Agency for International Development (USAID), ends March 31 after successfully increasing financial access for the country's rural poor.
The success of this and other sector-wide initiatives, which addressed the needs of credit unions and other microfinance providers, drew nearly 25,000 people into formal financial institutions. Other accomplishments of the $2.4 million program included the development of microinsurance, the formation of an association of financial associations to foster the sector's development, widespread consumer information campaigns and the launch of Bolivia's first member-owned automated teller machines. (ATMs).
During the program's duration, the Ohio Credit Union League (OCUL) and Corporate One Credit Union, Columbus, Ohio, also participated in the development of Bolivia's credit unions through WOCCU's International Partnerships Program. OCUL representatives taught their Bolivian counterparts about financial services delivery methods, documentation processes and advocacy techniques. Corporate One created software that allowed credit unions to manage their own liquidity needs.
The program, launched in September 2006, received a grant in April 2007 to promote financial system development and provide access to the most disadvantaged population sectors by funding grants for financial expansion initiatives. The demand for the funds resulted in 30 proposals submitted from a variety of institutions, of which 15 were awarded through September 2009 for a total of US$284,000. Participant organizations attracted more than 15,000 new savers and nearly 10,000 new borrowers, far exceeding the original aggregate goal of 10,000 new savers and 4,700 borrowers.
Banco Sol, a microfinance institution awarded one of the 15 financial expansion grants, used the funds to launch three mobile banking units in the cities of La Paz, Cochabamba and Santa Cruz. Trucks converted into full-service branches now travel to populations with little or no access to financial services. Grant funds covered about 30% of the US$60,000 startup cost for each unit and the rest was paid by the bank itself.
"The financial expansion grant component was one of the most successful and innovative parts of this program," said Rolando Salazar, director of the WOCCU program in Bolivia. "We provide funding so that savings and credit institutions can offer financial services to populations in rural and suburban areas that have never had access to them before."
In 2007, the program began a market analysis to determine whether microinsurance should be offered through credit unions and other participating institutions. In 2008, agreements were drafted and three policies were launched, and by July of 2009 a total of five policies had been launched, including the first micro auto insurance policies to reach the Bolivian market. These micro policies are more affordable than traditional insurance policies, helping more members qualify and reducing their chances of having to spend their hard-earned savings on routine medical expenses or unexpected emergencies.
Throughout the program's duration, WOCCU worked with a variety of financial associations to create a committee to jointly represent the entire financial sector before regulators and the government. This effort resulted in the formation of the Association of Financial Associations (ASAF), devoted to representing all its members' interests regarding regulation and governance.
With the support of ASAF, the informational campaigns carried out by the program reached an estimated 1.25 million people, roughly 26% of Bolivia's population, mostly through the distribution of printed materials at 1,073 branches of various financial institutions. A corresponding children's savings campaign resulted in 1,432 new accounts opened in 12 financial institutions during the first promotional period in 2008, and 3,636 new accounts opened in 23 financial institutions during April 2009.
"In Bolivia, it was important to get together those institutions that share our mission to expand financial services to the rural poor in order to negotiate a supportive policy framework," said Brian Branch, WOCCU executive vice president and COO. "WOCCU project staff had the vision and the diplomatic savvy to bring different interests together to work towards that common goal and found great success."
In addition to expanding access to financial services in poor and underserved areas of the country, WOCCU's Bolivia program also helped credit unions increase the depth of their services through the establishment of ATMs in rural and fringe urban areas of the country where members previously lacked access to services. ServiRed S.A., a Bolivian credit union services corporation owned by WOCCU's for-profit subsidiary WOCCU Services Group, has purchased 50 ATMs and will continue to provide them to credit unions into the future as demand for card services develops.
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.