From Fragmentation to Ecosystem: What Ecuador Taught Us About the Future of Cooperative Finance

Kicking off our three-day exchange with Coonecta, CACPECO, and SanFra—exploring how cooperation, shared infrastructure, and strategic alignment are transforming credit union systems. Ambato, Ecuador—home to Cooperativa San Francisco (SanFra), where we explored how cooperative finance is evolving through digital payments and shared infrastructure. “In Ecuador, what stood out most was how Coonecta has succeeded in integrating the system. Beyond shared services, it’s about consolidating an ecosystem that strengthens each institution as part of a whole.” Franklin Treminio, IT Manager at FEDECACES in El Salvador. Latacunga—where CACPECO’s work in microfinance is rooted in the realities of local communities. Here, access to credit is paired with guidance and trust, helping entrepreneurs and small businesses grow. Exploring the future of financial services at the intersection of strategy, regulation, and technology with the Coonecta team. These conversations highlight how building a shared payments ecosystem requires not only infrastructure, but alignment, trust, and continuous dialogue.

Last week in Ecuador, a group of cooperative leaders from El Salvador and the Dominican Republic stepped into something more than a study visit. They stepped into a living example of what the future of cooperative finance could look like—and the tensions that must be resolved to get there.

Across conversations with Coonecta, CACPECO, and Cooperativa San Francisco (SanFra), one theme emerged consistently: The future of credit unions will depend not only on innovation—but on how well systems align regulation, collaboration, and culture.

A System in Transition

Ecuador’s cooperative sector has not always looked like it does today. Not long ago, many institutions operated with fragmented technology, developing systems independently with limited interoperability and inconsistent member experiences. This fragmentation drove up costs, as cooperatives duplicated investments in infrastructure and solutions while working in parallel rather than together. Without shared platforms, scaling services—especially to reach underserved communities—was difficult, and innovation moved slowly, constrained by limited coordination, resources, and the absence of a unified approach.

What we saw during the exchange was the result of a deliberate shift away from that model. At the center of this transformation is Coonecta, a shared services platform that has brought together more than 70 institutions into a coordinated payments ecosystem. By centralizing infrastructure—payments, cards, remittances, and transaction processing—Coonecta has allowed credit unions to reduce costs, accelerate innovation, and engage regulators more effectively to compete with traditional financial institutions.

Importantly, Coonecta has also emerged as a key interlocutor between the cooperative sector and regulators. By representing a coordinated network rather than fragmented institutions, it is able to translate operational realities into regulatory dialogue—helping authorities better understand the system while aligning credit unions around common standards. In doing so, it reduces friction, builds trust, and creates a more coherent pathway toward enabling regulation.

This is not just a technology story. It is a story about scale through cooperation.

Different Paths, One Direction

As our delegation traveled from Quito to Latacunga and onward to Ambato, a subtle but important dynamic came into focus. These institutions do not operate in isolation. They exist side by side—often serving the same communities, competing for the same members, and navigating many of the same pressures. Each has developed its own identity, its own strengths, and its own way of moving forward.

At CACPECO, that path is grounded in deep relationships. Their specialization in microfinance is centered on the belief that long-term impact requires education, guidance, and a close understanding of each member’s reality. It is a model defined by discipline, proximity, and trust.

SanFra, by contrast, is looking outward—toward the evolving digital landscape. With a clear sense of its capabilities and a readiness to engage beyond its traditional model, it has chosen to lean into payments and interoperability, recognizing that relevance in the future will be shaped by how seamlessly members can move and use their money in everyday life.

Different instincts. Different priorities. And yet, neither path is complete on its own.

What became clear over the course of the visits is that the real strength of the system does not come from any single institution’s strategy, but from the ability to connect those strategies into something larger. Through shared infrastructure and coordinated investment—particularly in digital payments—credit unions that might otherwise compete can begin to build together.

The lesson is simple: credit unions don’t need to think alike to move forward together—but they do need to align.

The Regulatory Question Beneath It All

While Ecuador offers a compelling model, it also sits at the center of a broader regional debate.

Recent legislative discussions raised the possibility that large credit unions could be required to convert into banking entities—a proposal that sparked significant concern across the sector. Although that requirement was ultimately removed, the conversation exposed a deeper tension that continues to shape the future of cooperative finance.

Larger credit unions across the region are increasingly seeking access to national payment systems and the ability to offer more sophisticated financial services—capabilities that require a higher level of regulatory recognition and integration into the broader financial system. At the same time, regulators are under pressure to ensure safety, soundness, and system integrity, often requiring stronger prudential frameworks before granting that access. Meanwhile, smaller credit unions—many of which are still building capacity—worry that additional regulatory burdens could limit their ability to operate sustainably or serve their members effectively.

Balancing these realities is not simple. But it is essential.

Ecuador’s experience also highlights the importance of institutional bridges. Platforms like Coonecta do more than deliver infrastructure—they help mediate the relationship between innovation and oversight. By consolidating technical capacity and representing the system collectively, they create a more effective channel for dialogue, reducing fragmentation not only in technology, but in regulatory engagement as well.

Three Countries, One Core Challenge

The exchange brought together participants from El Salvador and the Dominican Republic, each facing a different version of the same issue.

El Salvador: The Growth Threshold Problem

In El Salvador, regulation is tied to asset thresholds. As credit unions grow, they may be required to transition into a more formal regulatory category. While this creates a pathway for institutional advancement, it also introduces a structural tension: as institutions succeed, they may move beyond the cooperative framework that supported their growth.

The unintended consequence is a gradual segmentation of the system—where scale can lead to separation rather than deeper collaboration. Growth, in this context, risks becoming a point of divergence instead of a shared pathway forward.

Dominican Republic: The Access Barrier

In contrast, the Dominican Republic faces a different challenge. Many cooperatives operate with limited prudential oversight, preserving flexibility but restricting access to national financial infrastructure. Without a clear and proportional regulatory framework, institutions remain on the margins of modern payment systems and broader financial integration.

In this environment, both large and small institutions are affected. Larger cooperatives lack the regulatory recognition needed to expand, while smaller ones operate without the structure that supports long-term sustainability.

The result is not simply under-regulation—but a system without a clear pathway to scale.

Ecuador: The Balancing Act

Ecuador sits in the middle.

It has a structured regulatory framework with segmentation across institutions and a growing ecosystem for digital payments. But it is still navigating how to enable large credit unions to scale while maintaining cooperative identity and ensuring that smaller institutions remain connected to the system.

The challenge is not just balance—it’s cohesion.

What We Learned

Across all three countries, one issue is clear: The question is not whether to regulate—but how to regulate with purpose.

From the exchange, several lessons stand out:

• Proportionality is essential - Regulation must scale with institutional size and complexity—supporting growth without forcing transformation.
• Infrastructure unlocks opportunity - Without access to payments, interoperability, and digital channels, innovation cannot take hold.
• Collaboration creates scale - No single institution can build this alone. Shared platforms like Coonecta make system-level transformation possible.
• Culture shapes strategy - Different institutions will move at different speeds—but shared ecosystems allow them to move forward together.
• Access alone does not create inclusion - Without guidance and understanding, financial tools can remain underutilized or misused. Education and proximity are what transform services into impact.

Perhaps the most powerful takeaway from the week was not technical—it was relational.

Leaders from El Salvador and the Dominican Republic were not simply observing Ecuador’s model. They were engaging with it—testing its relevance against their own realities, informed by a shared set of cooperative values and a common commitment to serve their members:

• What could be adapted?
• What would need to change?
• What risks would need to be managed?

This is where Global Bridges creates value. It does not transfer solutions. It brings institutions together in a way that reflects the essence of the cooperative model itself: shared learning, mutual support, and progress built through connection. In doing so, it creates the conditions for informed adaptation—and for innovation that is both locally grounded and globally informed.

Looking Ahead

The cooperative model has always been about balancing purpose and performance—and today that balance is being tested by digital transformation, evolving regulation, and growing competition from fintechs and banks.

What Ecuador demonstrates is that the path forward is not simply about adopting new technologies or expanding services. It is about building systems that connect institutions, coordinate strategy, and create the conditions for scale.

In this model, shared infrastructure does more than reduce costs—it strengthens the sector’s ability to engage with regulators, align around common standards, and advocate more effectively for enabling frameworks. At the same time, integrated payment ecosystems and coordinated service delivery help ensure that financial services are not only accessible, but actively used—embedded in the daily lives of members in ways that build trust, capability, and long-term resilience.

The lesson is not to choose between tradition and innovation. It is to design systems where cooperation enables scale, regulation enables access, and technology supports meaningful inclusion. And where credit unions—large and small—can move forward together, with greater clarity, coordination, and purpose.

Thomas Belekevich
Director of Member Services
World Council of Credit Unions