During a presentation to the 2005 MBA Class of the London Business School (LBS), World Council of Credit Unions, Inc. (WOCCU) president and CEO Arthur Arnold challenged the next generation of world leaders to address the disconnect between "Macro" policies and "Micro" needs and to focus on Micro approaches to development.
"The only way to generate self-sustained growth is by focusing on the real needs of the 'Have Less' people. That requires that we move away from a Macro, Top-Down approach to development and focus on a Micro, Bottom-Up approach. Micro- Finance, which, in WOCCU's definition, includes Micro-Savings, Micro-Credits, Micro-Investments, Micro-Insurance and Micro-Payments, produces the highest returns in terms of self-sustained growth. And that's what the more than 5 billion Have Less people really need, not more dependence on outside money and aid, but self-sustained growth, to develop themselves, i.e., becoming independent. And that's what credit unions and WOCCU's approach to development are all about," Arnold told his audience at the LBS.
Of all the development dollars spent in the world, only about 50% reach the people for whom they were intended. "It's about time we realize we are doing something wrong in development," Arnold said, in reference to this problem. "Access to affordable financial services is a highly underrated priority on the development agenda of governments and donors [though] it's obvious from our experience in the 'Have More' world that without it, you cannot make any progress on the socioeconomic ladder in society." Arnold challenged his audience to "analyze where small enterprise, the engine and backbone of economic growth in the Have More world," would be if it lacked access to these services.
Arnold presented many success stories from Africa, Latin America, Eastern Europe and other places, of credit union-driven, Micro-Finance projects creating brighter futures for members and their families. He also drew attention to the powerful impact of Micro-Payments on development.
It is estimated that Micro-Payments, or remittances of $200 to $500 per month, are being sent by millions of immigrants worldwide to their families back home, indirectly supporting their communities. More than 90% of these international remittances is sent to women, and about 30% is being saved in credit unions on the receiving end. The total value of worldwide remittances is estimated at $100 billion per year. "That's 2 times what governments are spending on Foreign Aid in the world. However, of these Micro-Payments, more than 90% reaches the people [they are] intended for, versus only 50% for the development dollars. That's why WOCCU is in the forefront of promoting affordable international remittances in the world," Arnold stated, concluding that "the world needs more Micro and less Macro!"
Astrid Van der Schrieck, of the 2005 MBA class at LBS, had the following reaction after Arnold had concluded his 2-hour lecture: "Arthur Arnold's presentation was truly inspiring to me as an MBA student. It clearly demonstrates how we can apply the business skills taught to us in the classroom to address the world's most important development issues. It was so impressive to see how, through instilling pride rather than giving money, the World Council continues to improve lives around the world and build hope for the future."
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 103 countries serve 208 million people. Learn more about World Council's impact around the world at www.woccu.org.