HARRISBURG, Penn. -
CUJ: Describe the background for your recent trip.
Myxter: PCUA's association with WOCCU's efforts began in 2001, when we partnered with WOCCU during an initial Kenya trip to become familiar with their credit unions and the issues affecting them, including a need for a greater SACCO management training and industry regulation.
This trip coincided with the Strathmore WOCCU African Management Instituted (SWAMI).
Strathmore University in Nairobi trains mainly CPAs, but also offers management training. SWAMI's three-week training program for managers and volunteers produces certified SACCO professionals.
I sat in on some classes and attended the graduation of 15 SACCO professionals from seven different African countries.
There are now about 80 SWAMI graduates who've returned to their respective credit unions as the next generation of Kenya's credit union leaders.
CUJ: And the regulatory issues? How are those progressing?
Myxter: Kenya's government formed a Ministry of Cooperatives and Marketing with a permanent secretary designed to eventually become the SACCOs' regulatory body. Initial discussions were held and initial draft of the regulation presented four years ago. The secretary has visited with U.S. regulators and WOCCU staff has tried to convince Kenya's parliament to pass the necessary legislation, including a need for a unified regulatory body and unified accounting methods. There are about 2,500 active SACCOs in Kenya, the majority of which are very tiny. Nevertheless, they're a very important part of the lives of the Kenyan people.
We anticipated that the legislation would pass this year, but we've said that now for four years. Eventually, we will get it through.
CUJ: Have you visited and worked directly with SACCOs?
Myxter: We're working with a SACCO called Mwalimu, a very large educational cooperative with 40 branches and 45,000 members throughout Kenya, on an HIV/AIDS awareness program. We're partnering with an organization called JHPIEGO, an offshoot of Johns Hopkins University that has trained 27 peer educators who, in turn, each trained five peer leaders, all of whom went back to their respective schools to share AIDS-related information. This will be replicated with the ultimate goal of having 1,000 peer educators across Kenya to discuss ways to counter Africa's AIDS epidemic.
CUJ: This activity is a departure for most credit unions, especially those in this country. How widespread is the SACCO's financial and social influence?
Myxter: Kenya's a very poor nation and the majority of people have no access to credit. SACCOs provide the only form of credit available to the average person, most of whom may make less than $1 a day. SACCOs have traditionally been savings organization that allowed you to borrow twice the amount you have in savings. There's no state-run educational system and no health care networks. Members deposit money to eventually borrow in order to fund their children's education and for health care reasons.
This trip I went to the Mt. Kenya area and visited two large SACCOs serving the tea industry near Nyeri. We also visited two different tea farmers.
One farmer had 180 acres of tea and employed more than 200 tea pickers who literally live from hand to mouth. The farmers and pickers are learning how to save money with peer savings programs that teach them how to use their own funds rather than borrow money to buy things. New SACCO remittance programs also allow Kenyans to receive or send money to the states or other parts of the world.
CUJ: What were your impressions when you first walked in the doors of the more progressive SACCOs?
Myxter: The CUs are very member-focused with strong member commitment. Most U.S. credit union annual meetings don't attract a lot of participants. In Kenya, the annual meeting is a major two-day event that includes training for members, who clearly see it as their own financial institution. SACCOs and the church are the population's primary influences.
In a progressive SACCOs, management is well trained. They know what they do, but there's a great need to change their method of doing business to better follow the markets and practice better asset-liability management. They need to become better financial advisors to their members. They know what they want to do, but they don't have the funds to do it.
CUJ: Has your involvement in Kenya changed your perception of what credit unions should be?
Myxter: I think it's reminded me of why credit unions were first organized. My experience has brought me around to square one in trying to work in underserved areas. When we've had visitors from SACCOs come and spend time in our credit unions, our members have said they've learned more from these individuals than they could possible teach them. It makes you feel good about what you can do to help the movement.
CUJ: What is the future for SACCOs?
Myxter: With the eventual passage of the resolution through parliament, SACCOs will have a period of time to rise to certain standard. That will mean some failures and some mergers, but from that will come a much stronger Kenyan credit union movement. The SACCOs will become a competitive force and we're now seeing some of Kenya's banks attempting to replicate what the SACCOs are doing. I think there's a definitely a bright future for them.
For more on the World Council program, visit www.woccu.org.
