Global Financial Crisis Concerns African Credit Union Regulators
Rising Food Prices, Declining Aid Topics for WOCCU Roundtable Attendees
|African SACCO regulators gathered in Pretoria, South Africa last week to discuss issues facing the continent's credit unions.
PRETORIA, South Africa—The growing global economic crisis was only one topic discussed by financial regulators gathered for World Council of Credit Union's (WOCCU's) second annual African SACCO Regulators Roundtable last week. But fallout from the looming recession could have a very real impact on members of the continent's rapidly growing number of credit unions, known as savings and credit cooperatives, or SACCOs.
"Africa is a dynamic environment for SACCOs today," said Dave Grace, WOCCU's vice president of association services and roundtable coordinator and host. "This factor, combined with the current global economic slowdown, presents regulators with a series of challenges few regions have to face."
According to WOCCU's 2007 Statistical Report, released in June, Africa supports 11,849 SACCOs that serve 15.1 million members, numbers up from 2006, when 8,237 SACCOs served 13.1 million members. The economic recession, coupled with other social challenges, such as the HIV/AIDS pandemic, raise the stakes on the importance of SACCOs to their members and the SACCOs' continued ability to serve in the face of such crises, Grace indicated.
Some 40 regulators from seven African nations, Canada and the United States had gathered in Pretoria, South Africa for the two-day roundtable sponsored by WOCCU, the Canadian Co-operative Association (CCA) and the National Treasury of The Republic of South Africa. Impact from the global recession could have a severe effect on food prices, which have already started to rise, according to Grace. In addition, economic downturns in developed countries often result in declines in financial aid and reductions in charitable giving, all of which could raise unforeseen challenges for Africa's SACCOs, he added.
"The African Regulator Roundtable provided supervisors, policymakers and SACCOs an opportunity to learn from each other and build support systems across the continent," said Jo-Anne Ferguson, CCA's senior development director. "This is the second roundtable that we have helped to convene, and I think the need for such gatherings is greater than ever."
Regulatory and economic issues topped the agenda, including opening comments by National Treasury Deputy Minister of Finance Nhlanhla Musa Nene, who read from a letter sent by WOCCU President & CEO Pete Crear to finance ministers of the G-20 countries. The letter, submitted prior to the Nov. 15 G-20 meeting in Washington, D.C., asked for recognition of financial cooperatives' lack of culpability in any regulatory steps taken to address the global economic crisis.
Other agenda topics included lessons in legislative development, designing supervisory systems appropriate for financial cooperatives and building service capacity among the continent's SACCOs. Roundtable participants included representatives from Ghana, Kenya, Lesotho, Malawi, South Africa, Tanzania and Uganda, all of which have SACCO-specific legislation in development. The participants agreed there was a great deal of value for those who attended the event.
"This was the first time I attended the roundtable, and the wealth of knowledge and experience was really rich and diverse," said Olaotse Matshane, the National Treasury's director of financial inclusion. "Just when I thought I knew so much about SACCOs and their regulations, the roundtable helped me realize that I know so little and there is much South Africa can learn from other countries."
Harry Namable, acting director for the Bank of Tanzania, agreed. "I learned that while we are at different levels of development and in different environments, we have common challenges and can learn from each other," he said. "Seeing the range of activities from various countries in the region helped our learning."
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.
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Contact: Rebecca Carpenter
Organization: World Council of Credit Unions