Interoperable Digital Financial Systems for Credit Unions


October 2018 - November 2019
Philippines, Indonesia, Global
 

Project Overview

For economically disadvantaged populations with poor access to financial services, digital financial systems hold the opportunity for expanded access to financial services and resulting enhanced economic opportunity. The digitization of interoperable payments platforms offers alternatives for underserved people who may have to travel significant distances to access cash and important financial services. Many credit unions serving economically disadvantaged communities have not yet digitized their services, in turn limiting their ability to provide members access with safe and affordable financial services.

The Interoperable Digital Financial Systems for Credit Unions is a one-year planning-phase project for the design of an interoperable, open-loop, low-cost, real-time payment platform for its network in credit unions across Asia, supported by the Bill & Melinda Gates Foundation. The first phase will focus in Indonesia and the Philippines, where the numbers of underserved and unbanked people are approximately 95 million and 69 million, respectively. As part of this first phase, WOCCU is conducting assessments in both countries, focused on several key dimensions: governance, operations, business model, regulatory, and technology.

WOCCU is working with its regional partners, the Association of Asia Confederation of Credit Unions (ACCU), the Credit Union Central of Indonesia (CUCO), and two national associations in the Philippines – the National Confederation of Cooperatives (NATCCO), and the Philippines Federation of Credit Cooperatives (PFCCO). Through this project, WOCCU is also partnering with ModusBox, Inc., who will focus on technical configuration and development of a live demonstration platform, and with Paysys Global LLC, who will provide oversight on key project aspects including business, operations, and regulatory requirements.

The anticipated next phase of this project will build upon the methodology developed in the planning phase and will scale regionally, paving the way for global expansion.

Quarterly Update (April 2019)

Over the past quarter, WOCCU concluded follow-up activities from the project launch workshop in November 2018. WOCCU and our partners, Paysys Global LLC and ModusBox, Inc. traveled to both countries to meet with regional partners, relevant government / regulatory entities, as well as other potential donors to explore how to extend interoperable payments and digital financial inclusion. WOCCU conducted on-the-ground research on financial and digital demand through Focus Group Discussions (FGD) with 200+ credit union members in both Philippines and Indonesia. The intent of these FGDs was to gain in-depth understanding of the connectivity of credit unions and receptiveness/attitude to discussion of digitizing systems. Notably, the results of these FGDs will allow the project to move forward with a deep understanding of the current reality on the ground.

Credit Unions in the Philippines (2017)

  • 1,680 total credit unions
  • 9.9 million members (15.15% of the population)
  • $4.5 billion in member assets

Credit Unions in Indonesia (2017)

  • 857 total credit unions
  • 2.9 million members (1.67% of the population)
  • $2.1 billion in member assets