Vol 09 No 02 May 2008   Te c h n i c a l s u p p o r t a n d i n v e s t m e n t f o r c o m m u n i t y f i n a n c e

                                                                AFTER ACCESS TO CREDIT,
                                                                ACCESS TO TRANSACTIONS
                                                                BECOMES THE NEXT PRIORITY
                                                                > p.2
                                                                INTRODUCTION OF
                                                                BIOMETRICS IN RWANDA
                                                                 > p.4
                                                                THE PROXFIN MANAGEMENT
                                                                COMMITTEE MEETS
                                                                IN QUEBEC CITY
                                                                 > p.8

                                                               Member of the Athurugiriya financial
                                                               cooperative in Sri Lanka

                                       AFTER ACCESS
                                       TO CREDIT, ACCESS
                                       TO TRANSACTIONS
                                       BECOMES THE NEXT

                                               ccess to credit leads to autonomy and is a                           The expected socio-economic impact
                                               safeguard against vulnerability. However,                            of this project will be far reaching.
                                               access alone is not sufficient. Individuals                           > Financial interconnectivity will bring
                                       must also be able to deposit their savings securely.                             economic interconnectivity. It will break
                                       They must have access to a choice of savings,                                    down rural isolation and encourage economic
                                       credit and insurance products. This choice of                                    activity in these regions.
                                       options is as essential in developing countries as it
                                                                                                                     > Interconnectivity will increase the appeal of
                                       is here. Additionally, in order to truly benefit from
                                       these services, they must have secure and user-                                  financial cooperatives. It will encourage more
                                       friendly access to them.                                                         individuals to open accounts and deposit their
                                                                                                                        savings, knowing that they can withdraw
                                       Therefore, it is our belief that special emphasis                                funds easily wherever they are.
                                       must be placed on the design and deployment
                                       of transactional mechanisms so that they meet                                Interconnectivity is not just a goal in itself, it is
                                       these criteria. These mechanisms are as impor-                               a new step towards developing the community
                                       tant as the financial services themselves and                                finance sector in developing countries. This step
                                       should be an integral part of the services offered                           will contribute to eliminating the barrier of insecu-
                                       by financial institutions.                                                   rity felt by members. They will benefit and in turn
                                                                                                                    stimulate economic activity in rural areas as well
                                       At the start of the year, the Bill and Melinda                               as between rural and urban areas.
                                       Gates Foundation associated itself with DID to
                                       launch a large-scale project aimed at intercon-                              The increase in these economic activities will
                                       necting 250 financial cooperatives reaching                                  undoubtedly lead to greater interest on the part
                                       830,000 members on three continents. This                                    of entrepreneurs, families and investors in their
                                       project will soon allow the members in each                                  local microfinance institutions. These institutions
                                       of the six networks concerned to make inter-                                 will be able to continue to diversify the range of
                                       institution transfers of funds. Interconnectivity                            products and services they offer based on local
                                       will also make it possible for individuals working                           needs, update their technology, and thereby
                                       abroad to send money home to their families.                                 continue their mission of making financial servi-
                                                                                                                    ces an accessible asset, so that individuals can
                                                                                                                    take charge of their own development and make
                                                                                                                    their dreams and projects come true.
                                                                                                                    More than ever, the cooperative
                                                                                                                    world is serving its members.

                                                                                                                    Anne Gaboury
                                                                                                                    President and Chief Executive Officer

                                            Intended for Développement international Desjardins partners, the Finance & Communities information bulletin is published four times annually, twice
                                            in paper format and twice in electronic format. This issue has a print run of 3550.
                                            ISSN 1195-6763 / Legal Deposit: National Library of Canada and Bibliothèque nationale du Québec.
                                            This publication is printed in Canada on 30% postconsumer paper

2   Finance & Communities | May 2008

                                                                                                                          A Caisse populaire de Cissin service outlet

                                                 ADELINE ZONGO
                                                 Among DID partners are individuals who have         products such as specialized loans and services
                                                 shown extraordinary dynamism and creativity in      for women and entrepreneurs, housing loans,
                                                 working to increase access to financial services.   insurance, etc. In addition to these innovations
                                                 During International Development Week held in       she successfully introduced automated financial
                                                 February, the commitment of 4 of these out-         operations to her coop.
                                                 standing partners, who are all highly involved in   Under her direction, the Caisse populaire de
                                                 Proxfin member community finance institutions,      Cissin underwent rapid growth and today can
                                                 was highlighted.                                    be proud of its exceptional performance with a
                                                 Adeline Zongo was named a DID outstanding           membership that has risen to nearly 30,000.
                                                 partner in 2007.                                    This enviable situation, combined with her out-
                                                 A manager focused on                                standing qualities as the cooperative’s main
                                                 the needs of her community                          manager, led to Adeline Zongo being made a
                                                                                                     Chevalier de l’Ordre National in 2004 by the
                                                 Adeline Zongo has worked with Burkina Faso’s        President of Burkina Faso.
                                                 financial cooperatives for 23 years and has
                                                 played a leading role in the evolution and growth
                                                 of these institutions.

                                                 Adeline Zongo has, since 1990, been the
                                                 Director of the Caisse populaire de Cissin in
                                                 Ouagadougou, the capital of Burkina Faso, and
                                                 is respected for her awareness of the many
                                                 needs of her community. She has been involved
                                                 in the testing, introduction and marketing of
                                                 numerous innovative financial services and

           Adeline Zongo, Director of the

Caisse populaire de Cissin in Burkina Faso
                                                                                                                     May 2008 | Finance & Communities                   3

                                       RWANDA                                                Configuration of the biometric application has
                                       FACILITATING SECURE                                   been integrated into the parameters of the SAF
                                       IDENTIFICATION                                        transaction software already in use in the seven
                                       OF CLIENTS                                            Agaseke CFE branch outlets. Linking validation
                                                                                             of client identity to processing a client transac-
                                       Biometrics. While you might feel this is highly       tion is therefore very easy. The application has in
                                       complicated technology, the 32,000 clients            fact been designed to facilitate the integration
                                       and employees of the Agaseke CFE in Rwanda            of new clients and any required changes and
                                       consider it a very simple affair. Since October       management of biometric data. All the activities
                                       2007, this innovative technology has been pro-        performed by the application are recorded in the
                                       viding easy and highly secure identification of       biometric database and can be consulted quickly
                                       entrepreneurs in their dealings with the CFE.         using reports designed to ensure rigorous control
                                       The operation is extremely simple. A tiny optical     over these activities.
                                       reader uses a client fingerprint to produce a         Introduction of this new technology is a first for
                                       unique code for that individual. It is the code and   DID and is part of the DID effort to facilitate
                                       not the fingerprint itself that is retained in the    secure access to financial services. By January
                                       CFE register. The code constitutes an additional      2008, approximately 11,500 transactions were
                                       signature to a conventional signature that previ-     being performed monthly based on biometrics in
                                       ously had been the sole means of client identifi-     Rwanda. It is likely that the goal set of achieving
                                       cation. The second signature is now obligatory        15,000 transactions monthly by June will be
                                       for authorizing client transactions.                  met. Based on this successful implementa-
                                       “Biometrics answers a growing need that had           tion, DID intends to deploy biometric identi-
                                       been widely expressed by CFE clients. We have         fication in other community finance institutions in
                                       seen a very enthusiastic response from clients        the near future.
                                       and there has been a marked reduction in the
                                       risk of fraud,” says Martin Villemure, CFE opera-
                                       tions advisor at DID, who managed the Agaseke
                                       CFE from January 2006 to February 2008.

4   Finance & Communities | May 2008
                                                        NEWS FROM
                                                        OUR PARTNERS

FINANCING:                                              Mexico, the world’s
A WELCOME INNOVATION                                    top exporter of coffee
Farmers often have little control over their profit     In San Cristobal de las Casas, Mexico, the SER-                    The lean period loan is an advance on the pay-
margins, since they have little control over the sel-   FIR cooperative provides financial services to                     ment by the marketing cooperative and is
ling price of the crops they market or the cost of      communities in Tabasco and Chiapas. SERFIR                         designed to allow growers to finance their acti-
the inputs needed for farming or raising livestock.     currently has 17 service outlets and its target                    vities and household needs without having to
Their position in relation to market traders is often   clientele is composed of low-income individuals,                   resort to selling to local traders at what are often
very weak. Today, the globalization of agricultural     often within indigenous communities.                               very low prices.
markets and the changing eating habits that go                                                                             As for the pre-export loan, it provides financing
along with the globalization of economies require                                                                          for processing and export activities by the coope-
farmers to have better understanding of commer-                                                                            rative giving them the needed room to manoeu-
cialization efforts. They can no longer just sell                                                                          ver while awaiting payment from importers.
what they grow, they need to grow the right kind of                                                                        Lean period loans for coffee growers have been
products that sell well in world markets.                                                                                  in a testing stage since April 2007 and a second
The markets for fair trade and organic products in                                                                         pre-export financing effort will be launched in
the developed world are prime examples of alter-                                                                           the spring of 2008.
native value-added export market niches. These                                                                             “The importance of this project is in the econo-
specialized trade channels provide farmers with a                                                                          mic benefit that it will bring to coffee growers.
higher stable income above market rates and have                                                                           Obtaining better prices will certainly make the
proven to have a structural effect on farmer orga-                                                                         regional economy more dynamic,” says Oscar
nizations and their communities.                                                                                           Armas, Director General of the SERFIR coope-
These emerging new markets are causing financial                                                                           rative in Chiapas (Mexico) who is also the
institutions in the developing world to adapt the                                                                          Chair of the Proxfin network.
services they offer in order to respond to the needs                                                                       The Chiapas region is ideal for this type of test
of farmers and farmer cooperatives. Fair trade is                                                                          since it is the location of several farmer coope-
one of the components of the DID PMCA project                                                                              ratives that export to fair trade and organic
                                                                     Oscar Armas, Director General of SERFIR Chiapas
to professionalize agricultural credit methodologies

                                                                                                                           markets. The test being carried out by DID is
providing assistance to partners to develop export                                                                         intended to develop and adapt its agricultural
financing products, a niche with tremendous             In the state of Chiapas, coffee exports are the                    loan methodology to meet the concerns of far-
potential in the areas where agriculture is the main    main source of income and it is home to 75,000                     mers selling to specialized export markets.
occupation.                                             coffee growers.                                                    Results of the test will later be shared with other
                                                        However, both the coffee growers and the                           partners in the Proxfin network of which SERFIR
                                                        cooperatives trading on specialized coffee                         is a member.
                                                        export markets have specific financing needs.
                                                        Regular access to finance along the production
                                                        chain is required for exporting to these more
                                                        lucrative markets.
                                                        SERFIR has understood and with assistance
                                                        from the DID agricultural credit professionals
                                                        has begun developing and offering two finance
                                                        products, a lean period loan for small-scale
                                                        farmers and a pre-export loan for cooperatives.

                                                                                                                                            May 2008 | Finance & Communities      5
                                                                                     NEW CHALLENGES

               Members of the Tonala financial cooperative in Chiapas, Mexico

    In Mexico the government is pursuing efforts to
    improve access to financial services that are viable
    and adapted to the needs of those living in mar-
    ginalized rural areas. A second technical assis-
    tance contract for that purpose has been awarded
    to DID by SAGARPA, the Mexican secretariat for
    agriculture, livestock, rural development, fisheries

                                                                                    SRI LANKA
    and food (Secretaría de Agricultura, Ganadería,
    Desarrollo Rural, Pesca y Alimentación).
    The financial cooperatives set up in Mexico since                               TOOLS TO SUPPORT GROWTH
    2003 by DID in the marginalized areas of Chiapas,                               Modernizing the financial cooperatives using infor-     Information technologies
    Huasteca and Puebla have combined resourceful-                                  mation technologies and training for the managers       Over 25,000 members in thirty primary societies in
    ness and discipline, enabling them to adequately                                and directors are the challenges facing the             the SANASA network will benefit from introduction
    serve a poor and mainly indigenous clientele while                              SANASA network in the coming year and for               of the Microbanker for Windows banking transac-
    progressing towards profitability.                                              which DID will be providing consulting expertise.       tion system. Upon completion of the project, a local
    These institutions reach over 50,000 members,                                   Since DID began its activities in Sri Lanka two         information technology (IT) team will have been
    56% of whom are women and 71% of whom live                                      years ago, many leaders from across the SANASA          trained. As a result, other financial cooperatives in
    in rural areas. The cooperatives in Chiapas and                                 Movement have been expressing the need for the          the SANASA network that has 8,400 coops across
    Huasteca are already financially self sufficient                                primary societies to install a modern transactional     the country will be able to install transaction sys-
    while the newest institution, in the state of Puebla,                           banking system for integration into the global          tems with support from local experts.
    is making steady progress.                                                      financial services system. This is an indication of     Capacity building
    This second phase of the project targets consoli-                               the leaders’ concern for improving the services pro-
                                                                                    vided by the primary societies in order to remain       Awareness-raising sessions on the business of
    dation of access to financial services in rural areas
                                                                                    among the top providers of financial services in        banking, and on the characteristics of highly per-
    and significantly increased membership among
                                                                                    rural areas and the areas affected by the tsunami       forming networks of financial cooperatives around
    the poor. Specifically, it is hoped that by the end of
                                                                                    in Sri Lanka.                                           the world, will be provided to the leaders and staff
    this new phase the participating financial institu-
                                                                                                                                            of the primary societies. The project will also
    tions will have acquired 30,000 new members.                                    While a better computer system would certainly          address the latest trends in the banking sector in
    During the project, management methods will be                                  have a positive effect on the primary societies’        Sri Lanka and abroad, as well as how the leading
    improved so that the financial cooperatives can                                 image and efficiency, the experience acquired by        financial institutions invest in capacity building
    become licensed savings and credit institutions                                 DID shows that it is not enough to improve all          for their leadership and staff regarding banking,
    under Mexican law. Capacity-building for operators                              aspects of the operations. This must be accompa-        financial analysis, etc. An internship within the
    in these institutions will therefore be an important                            nied by an additional training program for directors,   Desjardins Group will be organized for ten leaders
    component of the project. Finally, the project will                             managers and employees to develop the capacity          from the SANASA network.
    stimulate the establishment, strengthening and                                  to provide the appropriate banking services to
                                                                                    members with a more professional attitude.              These interventions will contribute to project acti-
    expansion of financial cooperatives in rural areas.
                                                                                                                                            vities aiming at ensuring long-term development
                                                                                    Consequently, and in an effort to ensure a wider        and growth for financial cooperatives in Sri Lanka
                                                                                    impact on the members of the primary societies          by fostering stronger business and program links
                                                                                    living in tsunami-affected areas, the SANASA            among domestic organizations and among national
                                                                                    Development Bank and DID will be collaborating          and regional organizations. These stronger ties will
                                                                                    over the coming year in order to achieve these two      lead to a stronger community finance network
                                                                                    complementary priorities.                               able to improve access to financial services in rural
                                                                                                                                            and tsunami-affected areas and better able to
                                                                                                                                            influence decisions concerning network develop-
                                                                                                                                            ment that will be made by Sri Lankan authorities.

6   Finance & Communities | May 2008
                                                                           ON MICROFINANCE
                                                                           DID and its partners on the international scene
                        Mamadou Touré, Director General of PAMECAS

RECEIVE AWARDS                                                              THE DIRECTOR OF                                                      As an extension to the information session, DID
                                                                            TANZANIA’S DUNDULIZA                                                 held a luncheon conference for its partners. This
Quality is the goal!                                                        NETWORK ADDRESSES                                                    meeting gave Mr. Mahuwi an opportunity to
In February, Senegal’s PAMÉCAS network of                                   DESJARDINS DELEGATES                                                 provide additional details on the microfinance
savings and credit cooperatives received an Arch                                                                                                 environment in Tanzania and the many chal-
of Europe gold category international star for qua-                                                                                              lenges facing Dunduliza, an institution that is
lity award for its commitment to quality. Awarded                                                                                                still young and entering into a phase of inte-
by Business Initiative Directions, a private European                                                                                            gration into a federated network. The pre-
organization, this prize is internationally recognized                                                                                           sentation drew many questions and allowed
and is intended to provide a worldwide endorse-                                                                                                  the participants as well as the speaker to assess
ment of continuous improvement in performance                                                                                                    several different paths for dealing with the cur-
by enterprises in terms of processes, products and                                                                                               rent challenges.
services. The criteria for the award are based on                                                                                                The five DID partners who are members of the
the QC-100 quality model for total quality mana-                                                                                                 management committee for the Proxfin inter-
gement that encourages organizations to place                                                                                                    national network also attended the Desjardins
priority on customer satisfaction and human                                                                                                      Group annual general meetings, immediately
resources and to strive for business results, tech-                                                                                              after the six-monthly committee meeting (see
nological innovation and leadership in society                                                                                                   the article on page 8 of the bulletin). Mr. Mahuwi
                                                                                                                                                 emphasized the strong ties among Proxfin mem-
                                                                                                                                                 bers and the Desjardins Group. “Even though we
                                                                                                                                                 represent community finance institutions that
                                                                                                                                                 vary greatly in size, age and language used,
                                                                                                                                                 we have a lot in common, starting with the
                                                                                         Tasilo Joseph Mahuwi, Dunduliza Managing Director
                                                                                                                                                 Desjardins model and values,” he concluded

                                                                                                                                                 at the end of his speech during the DID informa-
                                                                            The yearly DID information session was held                          tion session.
                                                                            March 29 in Quebec City. Organized at the same
                                                                            time as the annual general meetings of the
              Employees in a SANASA network cooperative in Sri Lanka
                                                                            Desjardins Group, this year’s session empha-

                                                                            sized the crucial importance of agricultural
SANASA in the microfinance Top 50                                           finance in developing countries.
The SANASA Development Bank in Sri Lanka                                    After presentation of the video entitled Agricul-
has been recognized by influential Forbes                                   tural finance at the heart of rural development,
Magazine as one of the fifty best microfinance                              filmed in Burkina Faso, Mexico and Tanzania,
institutions in the world. The Top 50 were esta-                            the managing director of the Dunduliza network
blished by the Microfinance Information Exchange                            of financial cooperatives, Joseph Tasilo Mahuwi,
(MIX) from among 641 microfinance institutions                              addressed the thousand Desjardins managers
based on their size, effectiveness, risk manage-                            and directors in the room sharing with them the
ment and rate of return. This is a well-deserved                            accomplishments of his institution, especially
recognition for the efforts undertaken by this vast                         its plan for diversification and improved profes-
network of over 8,000 financial cooperatives that                           sionalism in agricultural finance. “We are moving
has played a major role in the reconstruction of                            from a situation where growers had access to
Sri Lanka after the terrible tsunami that devas-                            basic savings and credit services only, to one
tated the country in December 2004.                                         where they now get adequate help at every
                                                                            stage of their production cycles,” he explained.
.                                                                           Mr. Mahuwi also took the opportunity to salute
                                                                            the contribution made by the Desjardins Group to
                                                                            the development of his institution.

                                                                                                                                                                  May 2008 | Finance & Communities    7
                                                  THIS SECTION OF THE FINANCE & COMMUNITIES BULLETIN IS
                                                  DEVOTED TO NEW DEVELOPMENTS WITHIN PROXFIN, A
                                                  NETWORK SET UP TO STIMULATE IDEAS AND DISCUSSION
                                                  AMONG ITS MEMBERS.

MANAGEMENT                                                                A delegation of 12 Lithuanians traveled to the                           ment. The RCPB network, in its efforts to assure
COMMITTEE MEETS                                                           Philippines in the week of November 20 to visit                          its own permanence and offer better quality
IN QUEBEC CITY                                                            financial cooperatives, regional outlets and the                         service to its members, made a wise commit-
During the week of March 24 the five DID part-                            Confederation. “We were highly impressed with                            ment to IT.
ners who make up the Proxfin management com-                              the transfer of funds service that has been insti-                       Although the financial and technical partners
mittee came to Quebec City for their regularly                            tuted by NATCCO and we intend to replicate                               welcomed technological modernization as a sign
scheduled meeting. Many discussions were held                             this innovation in our institution,” stated Sigitas                      of maturity, the feeling among employees and
that were essential for consolidation of this demo-                       Bubnys, LCKU Director General after the visit.                           members was not the same. Employees dreaded
cratically organized group that is charged with                           The experience was also highly valuable to the                           job losses to computers. Members feared that
representing the interests of the thirty members                          host organization. “The exchange program                                 their community finance institution would become
of the network and overseeing progress of the                             allowed us to see that it really was possible to                         less accessible and the cost of providing services
Proxfin work plan in accordance with member                               erase borders. At first we thought that our diffe-                       would skyrocket. They were also dismayed at
expectations.                                                             rent cultures would constitute a barrier to the                          the thought that service would suffer during the
Discussions centred on the next international                             endeavour but the opposite was true,” said                               testing and learning phase.
seminar which will take place in Quebec City on                           Cresente Paez, NATCCO Director General. The                              Today the apprehension has given way
October 8 and 9 and which will be focused                                 Philippine director and four other representa-                           to collective pride for the following reasons
on the topic of social performance. This seminar                          tives of the Southeast Asian organization found
                                                                                                                                                    > After computers were installed, the number
will be followed by the Proxfin annual general                            that winter clothes were a necessity for their
                                                                          return exchange visit during the first week of                              of employees continued to grow
meeting on October 10.
                                                                          December and a Lithuanian winter.                                         > Initial slowdowns quickly disappeared

                                                                          “This was not simply an exchange of knowledge                               as tellers gained experience
                                                                          but also a manifestation of solidarity. Working                           > Operations are easier to process

                                                                          together, we can all become stronger!” said                                 by employees and are more reliable
                                                                          Director Paez after the visits were over.                                 > Members are no longer limited to

                                                                          AUTOMATING FINANCIAL                                                        a single teller window
                                                                          COOP OPERATIONS: FROM                                                     > The cost of services, although slightly

                                                                          APPREHENSION TO ENTHUSI-                                                    realigned, will not rise substantially.
                                                                          ASM BY DAOUDA SAWADOGO,
                                                                          Director General of the Burkina
                                                                                                                                                   The arrival of computers and transaction soft-
     Members of the Proxfin management committee in the company of                                                                                 ware has accelerated the pace of development

        Marcel Lauzon, Chair of the DID Board of Directors and Anne       RCPB network of financial cooperatives
                                    Gaboury, DID President and CEO                                                                                 for new products and services and will soon
                                                                          The vast endeavour begun four years ago to                               allow for the networking of all financial coope-
                                                                          integrate information technology across the                              ratives for inter-institution operations. Everything
                                                                          RCPB network of financial cooperatives reached                           that had been imagined is now becoming feasi-
                                                                          full momentum in 2005-2006 and any initial
                                                                                                                                                   ble as long as everyone continues to fulfill their
                                                                          apprehension has been completely transformed                             role efficiently to make the network a joint
The Proxfin work plan includes an exchange                                into enthusiasm.                                                         endeavour for all. Working in this manner all
program for partner institutions and the first                            Technological advances felt around the world                             those involved must support the RCPB reconfi-
exchange took place in 2007. After a call for                             over the last ten years have affected all busi-                          guration process without trepidation and without
proposals from all member institutions, the                               nesses. More than just a work and communi-                               reserve. Survival of the RCPB depends on it.
Lithuanian Central Credit Union (LCKU) and                                cations tool, information technology (IT) has
the National Confederation of Co-operatives                               become a tool for management and develop-
(NATCCO) in the Philippines were chosen to take
part in this initiative.

       Développement international Desjardins                                                                    Canadian International    Agence canadienne de          C
                                                                                                                 Development Agency        développement international
       150, avenue des Commandeurs, Lévis (Québec) Canada G6V 6P8                                     This publication was produced with financial support
                                                                                                      from the Government of Canada provided by the Canadian
            (418) 835-2400                    (418) 833-0742                  International Development Agency (CIDA).

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