MADISON, Wis. -
But the challenge, he said, will be finding the resources to support what undoubtedly will be WOCCU's largest credit union development project to date.
Those statistical assumptions come from conclusions drawn from a fact-finding trip WOCCU officials made to China in October 2006. Developmental plans based on that trip will be presented to the WOCCU board this week when it meets in conjunction with the organization's World Credit Union Conference in Calgary, Alberta, Canada. A follow-up visit to China's Guizhou Province, planned for next month, is designed to test whether it's feasible for WOCCU to move forward in helping the Asian giant revitalize its existing, but largely dormant credit union movement.
Currently, credit unions account for roughly 157 million members worldwide, according to Crear, who participated in WOCCU's October mission. China has more than 25,000 rural credit cooperatives (RCCs), credit union-type institutions that were severely hobbled under Communist rule in the 1950s. Despite restrictions, including an inability to accept member deposits during that time, China's RCCs still manage to serve some 200-million members across the country. WOCCU's initial phase will focus on working with seven large RCCs in Guizhou Province.
"Like credit unions in a lot of other developing countries, the RCCs need management training and they need products and services," Crear said. "The difference with China is that the numbers are huge and so is the challenge."
Another even more profound difference is that China itself is now welcoming WOCCU's services and influence in ways unprecedented during previous visits in the 1980s and 90s, said Barry Jolette, CEO of San Mateo CU in Redwood City, Calif., and incoming WOCCU vice chair. Last fall's China mission, as well as the anticipated August visit, will find a very different reception, Jolette said.
The Galloping Economy
"Last time around, the timing wasn't quite right," said Jolette. "But today the Chinese economy is galloping forward. We've finally hit a time when Chinese government officials are saying, 'Please, we'd like you to conduct a project with our RCCs.'"
China's roaring economy has coupled with Beijing's role in hosting the 2008 Summer Olympic Games to open what formerly had been a closed society to western influences and capitalist tendencies. At the same time, growing civil unrest resulting from chronic poverty in rural provinces, where most of the RCCs operate, has made rural financial conditions a high priority for a government that wants to be viewed as a world economic power. Assuming the necessary funding is found-Crear estimates as much as $10 million and three years' effort might be required during the initial phase-WOCCU's efforts will support development among the rural cooperatives where the help is most needed.
Central Bank's Assistance
Central to the success of any WOCCU project will be the assistance of the People's Bank of China (PBC), a financial institution that operates like the country's Federal Reserve Bank and already is working closely with WOCCU. Madame Wu Xiaoling, PBC's deputy governor, has assigned several staff to work with WOCCU during its feasibility study to determine how RCCs may be developed. According to a 2006 World Bank Report, RCCs in 2005 accounted for 10% of deposits and 87% of agricultural loans in China's financial system, giving the cooperatives a strong base from which to start.
Madame Wu's optimism brightened, Crear said, when she discovered that an experienced China hand would helm WOCCU's efforts. Ralph Swoboda, the former CUNA president who had been helping develop CUNA Mutual Group's overseas efforts, is leading WOCCU's China initiative in a consulting capacity. Swoboda's experience, including 35 visits to China on behalf of CUNA Mutual, has familiarized him with the country, the culture and the RCC system. Recent government initiatives have made what was once an unlikely goal more feasible, Swoboda said.
"Chinese regulators have already issued pilot legislation to start credit unions in seven provinces and we expect that legislation to spread this year," Swoboda said. "There's an old Chinese saying that anything is possible and nothing is easy. However, I'm optimistic that right now WOCCU can do something in China that's both meaningful and important."
Jolette echoes Swoboda's optimism. "I've only been to China twice, but I'd go again tomorrow to see if we could make a difference over there," he said.
