Peruvian CUs Pave the Way for Agricultural Lending Model

New WOCCU Manual Chronicles Award-winning Methodology

December 11, 2009

2009_12_11_Manuel Rabines in Peru
Value chain finance can mitigate credit union risk while serving more members, FENACREP's Manuel Rabines tells potential participants in Peru.

WASHINGTON, D.C.—As a development methodology, value chain financing has proved highly effective in helping credit unions in Peru reduce the risks of agricultural lending and expand access to affordable finance for rural populations. World Council of Credit Unions (WOCCU) has released the WOCCU Value Chain Finance Implementation Manual: Increasing Profitability of Small Producers, designed to help financial institutions, development finance organizations and donors better understand and implement the award-winning methodology developed in Peru. The manual was created in partnership with The SEEP Network, an international association for microenterprise practitioners.

Often referred to as a supply chain, a value chain is a series of activities, including financing, that take a product or service from its conception to market. The WOCCU value chain finance methodology, developed in partnership with the Federación Nacional de Cooperativas de Ahorro y Crédito del Perú (FENACREP), WOCCU's membership organization in Peru, is designed to assess and mitigate specific risks associated with financing existing rural value chains. The process also determines at which points along the value chain—from production to commercialization—financing can best support the different participants, particularly small farmers.

"Using this methodology, the credit unions can take into account the financial and market potential of the entire value chain, not just the creditworthiness of a single individual, as we have traditionally done," said Manuel Rabines, general manager and CEO of FENACREP and first vice chair on WOCCU's board of directors. "With this shift in focus, the credit unions can more accurately measure and mitigate risk, opening the door to potential rural participants previously seen as too risky."

The U.S. Agency for International Development (USAID), which funded the WOCCU/FENACREP Peru program, has lauded the effectiveness of the process, this past February awarding its first Innovations in Financing Value Chains award to WOCCU and FENACREP for the organizations' pioneering program. The award-winning methodology is fully outlined in the new manual, according to Anicca Jansen, senior technical advisor from USAID's Office for Microenterprise Development.

2009_12_11_Brian Branch in Peru
WOCCU's Brian Branch discusses value chain advantages with a Peruvian farmer.

"There is so much practical information in the manual to help a financial institution evaluate whether or not value chain finance is right for them and to actually start implementing it," Jansen said. "This publication will add value to the development community."

To date, six Peruvian credit unions have used the methodology to finance 36 distinct value chains through 76 rounds of financing. In total, credit unions have disbursed US$2.3 million through 1,573 loans to 4,686 rural producers, producer groups and other value chain participants.

In addition to Peru, WOCCU is implementing USAID-funded agricultural and value chain finance programs in Haiti, as well as programs in Kenya and Sri Lanka funded by the U.S. Department of Agriculture. WOCCU also is testing financial applications through new technology solutions—including point-of-service devices and personal digital assistants—designed to enable credit unions to reach even more people in the rural areas and increase the efficiency of providing rural finance options.

"Many rural poor face difficulties in increasing income and assets not only because of lack of access to financial markets, but also due to isolation from markets, lack of information about crop demand and product prices and lack of relationships between input suppliers and harvest buyers," said Brian Branch, WOCCU executive vice president and COO. "WOCCU's value chain programs increase income generation and wealth accumulation for poor households through simultaneous improvements in access to financial services and value chain linkages."

A copy of the WOCCU Value Chain Finance Implementation Manual may be downloaded free of charge at A Spanish version of the manual will be available in 2010.

For more information about The SEEP Network, visit


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 300+ technical assistance programs in 89 countries. Worldwide, 68,882 credit unions in 109 countries serve 235 million people. Learn more about World Council's impact around the world at

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Organization: World Council of Credit Unions
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