The Action West Africa Credit Union Programme Against Poverty Countries of implementation Ghana, the Gambia, Sierra Leone and Liberia Target Group Women, farmers, youth, all Credit Union members and their families. Credit Unions CU Apexes (national networks) Local NGO partners Final beneficiaries Direct: 731,000, Indirect: 3.65 million Background CUs are member owned financial co-operatives which collect members funds in the form of shares and savings and issue loans to members only. They are normally savings led (do not work with external funds). The CU tradition strong in Ireland, Canada and the USA. It is strong in Africa, with mixed results over the years. Generally known as SACCOs, in many countries they grew quickly with donor support but did not consolidate and either failed or stagnated. Some of the reasons for this were: - Multi purpose structure of the co-operative rather than dedicated financial co-operative - Poor governance, often by underskilled volunteers - Lack of scale, CUs too small, especially at village level - Lack of regulatory infrastructure - Donor dependency - War wiped out years of development Nevertheless there are strong CU movements across Africa and in English speaking West Africa Ghana and the Gambia have strong movements, both of which were revitalised in the 1990s with donor support, but which now function sustainably on their own. Statistics and Targets 1
Country Membership Savings Loans Baseline Target Baseline Target Baseline Target million million million million The Gambia 43,000 56,000 8.00 10.40 4.00 6.00 Ghana 460,000 600,000 108.30 125.00 72.50 90.00 Liberia 6,000 8,000 0.75 1.50 0.60 1.20 Sierra Leone 1,700 3,500 0.06 0.10 0.05 0.08 TOTAL 510,700 667,500 117.114 137.000 77.150 97.280 Overall target for membership growth 31% Savings growth 17% Loan growth - 26% African CUs are often perceived as focusing on the middle classes of society with limited focus on the very poor, or on enterprise support. It is true that workplace CUs have a strong profile among the employed and that CU members must have the capacity to save in order to build the institution. However African CUs can justifiably claim to be active among the very poor and the rural poor and to vulnerable groups, in particular women. The project aims to build the CU movement in 4 countries and to deepen the outreach of CUs to the poor and vulnerable. Main activities Irish CU movement delivers Training and TA to West Africa CU Movements Experienced African CU movements deliver Training and TA to their African neighbours 2
A total of c 200 days training will be delivered onsite to the movements. Just over half of this comes from Ireland to all 4 countries. The rest comes from Ghana and the Gambia to Sierra Leone and Liberia. These CU movements are very weak and just recovering from the recent wars. The topies for the TA and training are based on the needs assessments carried out with each movement. Country TA Needs Ghana General Risk Management Standardised MIS Deposit Guarantee Insurance Gambia General Risk Management Savings & Loan Protection CU Governance Prudential Standards CU Supervisory Manual Sierra Apex Body Formation Leone Support to Dept. Of Cooperatives Member Capacity Building Training Needs Strategic Leadership Strategic Business Planning Budgeting Team Building Delinquency Management Risk Management Governance Standards Interest Rate Policy (costing) CU Monitoring & Supervision Loan Management Financial Management Liberia General Risk Management Apex Body Formation CU Accounting & Auditing Resource Mobilisation (internal & external) Book keeping & Accounting CU Monitoring & Supervision Governance - Bye laws - Structures - BoD, SC education CBL Training Gambia and Ghana are advanced movements but require support to address weaknesses in their systems, to develop and consolidate new initiatives, and to reach areas still badly underserved by Cus and by MFIs. The needs of Sierra Leone and Liberia are very basic as they are building from square one. They will require long term support from donor in order to build national movements, but their first steps now should be based on sustainability of their CUs from an early stage. Deepen outreach of CUs to the very poor CUs have not examined their social performance over the years. This project will assist them to do that, so that CUs can be compared objectively to other MFIs. 3
Expand Credit Unions into rural areas, Link Credit Unions to Value Chains CUs have been most successful in urban areas. While many national movements have large numbers of CUs in rural areas and often a large membership, the use of these CUs is often low and they are often unsustainable. The project will help the movements develop strategies to address this. Research into how the CUs can link with the value chain of local markets is a key part of this strategy. While we do not encourage CUs to get involved directly in the markets (as they once did in the guise of multi purpose co-operatives) the CUs must understand the markets so that they can lend wisely to their members who depend on these markets. The project is also researching successful Ghana initiatives in group lending (microfinance type loans to small groups whose members may be too poor to be full members of a CU). This may be suitable for replication in other partner countries. Develop sustainable Apexes CU movements normally create a national apex body to support the development of the movement. Key services offered by the apex are - Monitoring of member CU activity - Representation of CUs to state - Liquidity management - Support products such as insurance - Protection schemes for CUs in difficulty - Technical services such as training, software The 4 countries are at different stages of development. Sierra Leone and Liberia have only nascent apexes, so must build from square one. Ghana and Gambia require high level support on the introduction of new services to CUs, but also require support on strategy to maintain apex sustainability and maintain growth of the national CU movement. Create CU Knowledge Management Hub in West Africa All the TA and training delivered in the project, all the research generated and all of the initiatives of the partners will lead to a large volume of valuable materials and knowledge. This will be made available to all partners and to the development community at large through the creation of a special web platform. This will be housed in Ghana at the Ghana CU movement purpose built training centre. 4
WACUPP Performance indicator Minimum threshold Description 12 months 24 months 30 months Target #1 Increase in Credit Union (CU) membership 8% 14% 20% 25% #2 Percentage of poor people among new members (c.f. Poverty Index sampling) 15% 20% 30% 37% #3 Number of CUs reaching an Operational Self Sufficiency >110% 0 1 2 2 #4 Percentage of women among new members 25% 32% 38% 42 % #5 Number of CUs launching Value Chain/Graduation Microfinance projects #6 Percentage of CU apex organisations using Social Performance Indicators and Poverty Index (mid-term) #7 Number of new policies introduced by the apex bodies into the CU movements, all meeting best international practice. 0 3 6 8 1 2 3 4 1 2 4 5 5