Deadline Nears For Award Nominations
MADISON, Wis.-Nominations for the World Council of Credit Unions' top individual and organizational honors are due no later than March 30. The awards, honoring exceptional achievements of individuals and organizations whose efforts improve people's lives through credit unions, will be presented during World Council's World Credit Union Conference, July 15-18, in Gdansk, Poland.
Individual recipients may be WOCCU member organization officers, directors or representatives; international credit union pioneers; field technicians with long and outstanding service records; or individuals whose actions have benefited global credit union development.
Institutional recipients may be organizations or agencies that have assisted with developing international credit union movements and service infrastructures over an extended period of time.
Download a nomination form at www.woccu.org/recognition. Nominations must be made by a World Council member organization (see www.woccu.org/members).
For more information on the 2012 World Credit Unions Conference, visit www.LetsGdansk2012.org.
Scholoarship Applications Due Soon
MADISON, Wis.-Applications for the Global Women's Leadership Network scholarship, which covers registration fees and partial travel costs for women from developing CU movements to take part in the Global Women's Leadership Forum, are due March 31.
This year's forum will be July 14-15, in conjunction with World Council's World Credit Union Conference in Gdansk, Poland. The network and forum bring together women from developing and developed countries to help participants meet the challenges faced by credit unions in their own countries.
Qualified recipients must demonstrate both financial need and successful contributions to their communities, credit unions and/or credit union systems. Scholarships are funded by network membership dues and the Canadian Cooperative Association, which is financially supporting the program for the second year. Scholarship offers will be made to successful candidates by the end of April.
For info: www.cuwomen.org/membership/scholarships/ or contact Nicole Bice at nbice@woccu.org or 608-395-2027.
Guatemala CUs Ramp Up Rural Lending
JALAPA, Guatemala-Credit unions in Guatemala are ramping up rural lending strategies to strengthen the agricultural sector and help grow the country's overall economy. Through a pilot program implemented by World Council of Credit Unions in partnership with Federacion de Nacional de Cooperativas de Ahorro y Credito (FENACOAC), its Guatemalan member, farmers are experiencing greater financial stability through their credit unions' support, WOCCU reported.
The five-year Cooperative Development Program (CDP), also operating in Mexico, is supported by $4 million in funding from the U.S. Agency for International Development. The program, which runs through 2015, focuses on creating and testing agricultural and financial tools to improve rural economic and financial sector development, personal income and food security. Participating farmers are expected to increase production, improve their livelihoods and offer better financial support to their communities.
Four CUs are currently active in the program, including Cooperativa Tonantel Guatemala's Jalapa region, which was able to leverage the program to help it add agricultural lending to its portfolio and lowered its interest rates on loans. Membership has since grown by 30% to 70,000 members, and loan delinquency now stands at just 1%, WOCCU reported.
For info: http://improveruralincome.woccu.org.
Coffee Value Chain Program Launched
VERACRUZ, Mexico-Buy a cup of joe, improve a life.
World Council of Credit Unions' Cooperative Development Program (CDP) is helping to implement a coffee value chain financing program in rural Mexico.
The program offers farmers access to financial and agricultural tools that enable them to improve their organic coffee crop, sell it at higher prices and increase their personal financial returns.
The five-year program focuses on creating and testing agricultural and financial tools to improve rural economic and financial sector development, personal income and food security. The resulting "toolbox" for credit unions includes a replicable and scalable methodology to meet the financial service needs of small farmers and increase their access to markets, inputs and technical assistance for production.
Part of the strategy currently being implemented by Caja Zongolica, one of two pilot credit unions involved in the CDP program in Mexico, involves helping farmers switch to organic production methodologies that result in coffee that commands a higher market price, WOCCU said. Currently, nearly 25% of the 122 farmers participating in the program who have switched to organic production also work as promotores, or internal inspectors who provide peer-to-peer technical assistance and guidance to other farmers interested in organic production.
Caja Zongolica, established 15 years ago to serve coffee farmers, for several years has been implementing the Semilla Cooperativa [Cooperative Seed] program, which sends credit union representatives by motorcycle and on foot to conduct credit union transactions where the farmers live and work. Later this year, the credit union will update the personal digital assistant (PDA) mobile transaction technology developed by World Council that allows field officers to remotely conduct loan monitoring, evaluation and approval processes in real time.
The past success of Caja Zongolica technology applications was the inspiration for a similar program launched last year by California's Ventura County CU, which remotely serves farm laborers and others at their respective worksites. Both initiatives will be the focus of this year's engagement study programs sponsored by World Council's Global Women's Leadership Network. Learn more about the network and its programs at www.cuwomen.org.
For info: http://makingadifference.posterous.com and http://improveruralincome.woccu.org.
Economist Explains Basel III For CUs
WASHINGTON-World Council of Credit Unions tapped a veteran economist to help credit unions explore how the Basel III guidelines concerning financial institution capital levels will impact credit unions and other financial cooperatives.
Glenn Westley, an economist who has worked with credit unions an in the microfinance sectors, offered insight into the Basel changes at a recent WOCCU webinar.
"Are credit union shares defined on the balance sheet as capital or as a liability?" Westley asked participants from seven countries who participated in the webinar. "It depends on what you do with them."
The two-hour online event, delved into the history of the Basel guidelines, which have become the basis for financial regulations in a growing number of countries, and the changes that have occurred since the first Basel Capital Accord in 1988. Basel I, as it was called, was developed primarily to serve as operational guidelines for large money-center banks domiciled in the Group of 10 (G-10), the world's most economically developed countries at the time. The guidelines' safe operating principles grew in popularity and eventually applied to both large and small financial institutions in more than 100 countries.
Basel I identified credit risk as the main threat to financial institution safety and soundness and recommended an institution must hold at least 8% of capital in risk-weighted assets, comprised of a variety of financial instruments. The committee revised its requirements for Basel II, issued in 2004, maintaining similar capital levels to protect against risk but requiring additional capital charges for operational risk (such as fraud) and market risk (such as interest rate risk). The Basel Committee issued the Basel III capital and liquidity guidelines in December 2010 and June 2011 in response to the failure of the previous guidelines to prevent the global economic recession of the past few years. The latest guidelines revised the view of how capital standards are measured and applied, Westley said. "In general, Basel III narrows the definition of what's acceptable and calls for more and higher quality capital than Basel II," Westley told participants.
In addition to revising capital requirements, the new guidelines propose the addition of a capital conservation buffer composed entirely of higher quality capital, a countercyclical buffer that comes into play if an institution's credit growth is excessive, and a leverage ratio that provides an extra layer of protection in the event of errors in financial risk models or in the values the Basel Committee assigns to risk-weighted assets.
Westley said financial institution safety still comes down to a question of capital adequacy, and for CUs, that can be a question of how member shares are defined and how the credit union treats member access to those shares.
Credit unions must treat shares that can be redeemed by members without restriction as liabilities on the balance sheet, Westley said, explaining that members can withdraw such shares and that necessary capital can disappear when the credit union needs it most. Credit unions that can unconditionally refuse share redemption, however, can treat those shares as capital, equivalent to common equity tier 1 (CET1) capital (the capital category that also includes retained earnings) because they can remain with the credit union in times of financial duress.
For info: www.woccu.org/_120201basel3woccu_.
Remote Tech Explored
MADISON, Wis.-This year's Global Women's Leadership Network engagement programs will focus on remote transaction technology applications.
Two groups of both men and women will examine how transaction technology, developed to provide financial services in rural Mexico, has been successfully adapted to serve farm laborers in southern California.
The first of this year's engagement programs will be May 20-25 at Ventura County CU in California, and the farms and organizations whose laborers it serves through financial services delivered via handheld personal digital assistants (PDAs) to members where they work.
A second, deeper dive into the program will be Nov. 5-10 in Queretaro, Mexico, where the technology and delivery strategy were first developed. This year's network forum is scheduled for July 14-15 in conjunction with the World Credit Union Conference in GdaÃ…â€sk, Poland.
For info: www.cuwomen.org.
Colombian Assn. Launched
BOGOTA, Colombia-A new credit union trade association has cropped up here.
The Asociacion Colombiana de Cooperativas Financieras y de Ahorro y Credito was established in December by 11 of the nation's 192 credit unions.
The new association recently met with World Council of Credit Unions Chairman Manuel Rabines of Peru and World Council CEO Brian Branch.
The founding credit unions serve 600,000 members and control 30% of all credit union assets in Colombia, a country in which 7.5% of the population (2.2 million people) are credit union members.
WOCCU has worked with Columbia's credit unions prior to the launch of the new trade association.
