& 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 EDITORIAL AFTER ACCESS TO CREDIT, ACCESS TO TRANSACTIONS BECOMES THE NEXT PRIORITY A 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 OUTSTANDING PARTNERS 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 NOTEWORTHY INNOVATIONS 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 PRE-EXPORT 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 > MEXICO CONSOLIDATING FOR BETTER GROWTH 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 SPOTLIGHT ON MICROFINANCE DID and its partners on the international scene Mamadou Touré, Director General of PAMECAS > PAMÉCAS AND SANASA 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- FIRST EXCHANGE integrate information technology across the ratives for inter-institution operations. Everything PROGRAM AMONG RCPB network of financial cooperatives reached that had been imagined is now becoming feasi- full momentum in 2005-2006 and any initial PARTNER INSTITUTIONS 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. www.did.qc.ca 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 firstname.lastname@example.org International Development Agency (CIDA).
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