PRESS RELEASE: Mexico Extends World Council of Credit Unions (WOCCU) Funding to Expand Rural Credit Unions

Source: World Council of Credit Unions (WOCCU).

Original press release available here.

MADISON, UNITED STATES, January 30 – World Council of Credit Unions (WOCCU) has begun a USD 24.8 million program to further expand rural credit union development in Mexico. The “Rural Microfinance Technical Assistance Project” builds upon two recent WOCCU programs that established 48 rural credit union branches and helped capture more than 83,000 new members in the states of Veracruz and Michoacan. The Mexican Ministry of Agriculture, Livestock, Rural Development, Fishing and Food (SAGARPA) provided funding for the three programs.

The three-year Rural Microfinance Technical Assistance Project will open new branches and points of service in rural communities of less than 15,000 people across 16 Mexican states. WOCCU will employ and enhance its proven outreach methodology called semilla cooperativa [cooperative seed] to extend rural outreach through 72 credit unions. Semilla cooperativa is an innovative group delivery approach to providing financial services, whereby field officers bring the credit union’s full range of products to communities in outlying villages at least once a month.

“The great achievement of WOCCU’s Michoacan and Veracruz programs was that they brought financial services to places where previously there was no affordable financial access,” said Luis Jara, former WOCCU program director in Veracruz and current chief of party in charge of the new program.

Just 32% of Mexico’s economically active population has access to formal financial services, compared to about 80% in developed countries. In Mexico’s rural areas, the figure drops to 5%. The underserved have had to turn to other lending sources, which oftentimes charge very high interest rates or don’t offer products and services tailored to their needs. Semilla cooperativa is a cost-effective and convenient way to bring not only credit, but also savings opportunities to remote communities.

SAGARPA awarded WOCCU the largest amount of four organizations that received funding to expand financial services to a total of one million people living in rural areas. Besides savings and loans, the program will explore a host of innovative products and services to help bring credit union access to the underserved.

Gabriela Zapata Álvarez, SAGARPA Director of Financial Organization Strengthening through the Rural Microfinance Technical Assistance Project, praised WOCCU’s proven success and expressed her confidence in the credit unions’ ability to further develop Mexico’s rural areas.

“Neither the size of the state, difficulty of access to marginalized areas nor diverse credit union needs have been obstacles for WOCCU’s technical team,” Zapata Álvarez said. “The project…successfully demonstrated that it’s possible to bank the rural, marginalized poor through disciplined, qualified and safe institutions that offer financial services adapted and integrated for them.”

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