MADISON, Wis. — The World Council of Credit Unions (WOCCU) said it has been awarded funding from the U.S. Agency for International Development (USAID) for the Cooperative Development Program – Technology and Innovation for Financial Inclusion (CDP TIFI).
The five-year, $7.7 million program, which runs until August 2023, will increase sustainable lending to small and medium enterprises (SMEs) by deploying WOCCU’s SME Lending Toolkit and building a global knowledge sharing platform, according to the World Council.
WOCCU said the three “key” regional partners at launch are: The Confederation of Financial Institutions of West Africa (Confédération des Institutions Financières de l’Afrique de ‘Ouest, CIF) in Burkina Faso; The National Federation of Savings and Credit Cooperatives (Federación Nacional de Cooperativas de Ahorro y Crédito, FENACOAC) in Guatemala, and the Kenya Union of Savings and Credit Co-operatives (KUSCCO).
What Program Will Do
“Using WOCCU’s SME Lending Toolkit as a guide, TIFI 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 said. “The program’s focus on digital transformation will also expand WOCCU’s role as a platform for its cooperative partners and members to learn about and experiment with global innovations in SME lending. TIFI will share learnings on a range of digital innovations from loan applications to alternatives credit scoring and e-payments, all important and timely topics for WOCCU’s global credit union networks worldwide.”
According to WOCCU, TIFI aims 1) to improve cooperative business performance fueled by SME lending to allow members to grow businesses, incomes and employ more people, with a focus on digital innovation; 2) to improve a cooperative enabling environment when supporting issues arise related to legal and regulatory environment and 3) to enhance development community support to cooperatives.
“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,” said World Council President and CEO Brian Branch in a statement.
Innovative Loan Analysis
WOCCU Noted the first Cooperative Development Program focused on credit unions in Guatemala, Mexico and Kenya was awarded in 2010. In that program, WOCCU said developed the first version of its SME Lending Toolkit focused on agriculture, which successfully reduced lending risks by “embedding” an agronomist with a credit union’s lending team and introducing an innovative loan analysis process.
Credit union loan officers use tablets with mobile apps to drive this ongoing digital transformation. Building on this success, WOCCU said the new TIFI program will start with the hub countries of Burkina Faso, Guatemala and Kenya and then expand regionally in Central America (Honduras and El Salvador) and West Africa (Senegal and Mali), providing a baseline for a wider global expansion and sharing.