The World Council of Credit Unions in Madison, Wis., has been awarded funding from a federal agency to help increase lending to small and medium enterprises globally.
The five-year, $7.7 million program, which runs until August 2023, will deploy WOCCU’s lending toolkit and help build a platform for its cooperative partners to learn about innovations in SME lending, the group said on Wednesday.
The U.S. Agency for International Development for the Cooperative Development Program – Technology and Innovation for Financial Inclusion provided the money. The Confederation of Financial Institutions of West Africa in Burkina Faso; the National Federation of Savings and Credit Cooperatives in Guatemala and the Kenya Union of Savings and Credit Co-operatives are three regional partners for the program.
WOCCU said that the program will “strengthen the knowledge, capabilities and governance” of credit unions to deliver SME loans by first building capacity at the national association level, then scaling nationwide to their member credit unions.
WOCCU added the program will share knowledge on a range of digital innovations, from loan applications to alternatives for credit scoring and e-payments, and will work to development community support to cooperatives.
“By leveraging digital innovation, World Council builds on its learning and successes from its current cooperative development program, using the SME lending toolkit through the TIFI program to increase access to finance and expand membership by providing advanced member services and risk management tools both at the cooperative level and the enabling environment level,” Brian Branch, WOCCU’s president and CEO, said in a statement.
The first cooperative development program focused on credit unions in Guatemala, Mexico and Kenya was awarded in 2010. In this previous program, WOCCU noted it developed the first version of its toolkit focused on agriculture, which reduced credit risk by embedding an agronomist with a credit union’s lending team and introducing an innovative loan analysis process, the group said.
In an attempt to build on this success, the new program will start with the hub countries of Burkina Faso, Guatemala and Kenya and then expand regionally in Honduras and El Salvador in Central America and in Senegal and Mali for West Africa. That will provide a baseline for a wider global expansion and sharing, WOCCU said.
