The document discusses microfinance through credit unions as a way to promote ownership of financial institutions by the poor. It notes that the Association of Asian Confederation of Credit Unions (ACCU) represents over 40 million members in credit unions across Asia, with over 6.8 million poor members who have partial ownership. Credit unions provide savings and loans to members, helping the poor build assets and achieve financial independence through collective ownership of the credit union.

1. Microfinance as a
Vehicle to Create a Platform for
Ownership of Financial Institutions by
the Poor
Cooperative/Credit Unions Prospect
Ranjith Hettiarachchi
Chief Executive Officer
ASSOCIATION OF ASIAN ASIAN CONFEDERATION OF CREDIT
ASSOCIATION OF CONFEDERATION OF CREDIT UNIONS UNIONS

2. ACCU
 Is a regional networking body of credit
unions or financial cooperatives in Asia
 We represent 40.5 million individual
 members from 21,892 credit unions in 25
countries in Asia
 With 6.8. million poor ownership of CUs
 17.5% owners are the poor
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ASSOCIATION OF ASIAN CONFEDERATION OF CREDIT UNIONS

3. Member own savings based Credit Union Involvement in Poverty Alleviation
157 years ago in 1852 credit union was established to
fight poverty.
“Credit Unions must not
confine themselves to granting
loans. Their main objective
should be to control the use of
money, to improve the moral
and physical values of people,
and their will to act by
Hermann Schulze-Delitzsch and themselves.” - Raiffeisen
F. W. Raiffeisen in Germany
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ASSOCIATION OF ASIAN CONFEDERATION OF CREDIT UNIONS

4.  A credit union is a cooperative financial institution that is
owned and controlled by its members, and operated for
the purpose of helping its members achieve financial
freedom.
Credit Financial
Union Independence
An all-inclusive organization. A Credit union is for everyone
regardless of religion, race, gender, and social status.
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ASSOCIATION OF ASIAN CONFEDERATION OF CREDIT UNIONS

5. Raiffeisen on Savings:
360 Degrees financial literacy education –
help poor reach financial independence.
“Many drops form first a
Creek...
Then a Stream.... and
finally, a River”
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ASSOCIATION OF ASIAN CONFEDERATION OF CREDIT UNIONS

6. Credit Union Microfinance :
1. Financial freedom for the
poor
2. Enables people to grow
3. Financial literacy for poor
4. Poor people build their own
financial institution
5. Sustainable income source
Accumulation of
wealth through savings
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ASSOCIATION OF ASIAN CONFEDERATION OF CREDIT UNIONS

7. Key Results, Effects, Impact
 6,899,405 New members
 15354 credit unions
 Savings of US$ 323.6 million
 Loans granted of US$ 223.8 million
 Repayment rate – 95% average
 11 countries – Nepal, Philippines, Sri Lanka, Thailand,
Bangladesh Vietnam Cambodia Laos Mongolia,
Indonesia and, Myanmar
The above is on top of the 2.01 million poorest among the
poor are reached by the Asian Credit Union system
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ASSOCIATION OF ASIAN CONFEDERATION OF CREDIT UNIONS

8.  Only 17.5% of CU members belong to the
poor, but total number is still significant as
the CUs are able to reach over 6.8 million
poor client-members
 CUMI is now active in 11 countries in Asia
but outreach and growth rate are still low. Till
this year only2.04 million poorest among
the poor
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ASSOCIATION OF ASIAN CONFEDERATION OF CREDIT UNIONS

9. How the poor become the ownership of the CU gain from?
1. Survey 2. Meeting 3. 5. Learn &
of the with Motivation 4. Group Save Sessions
Area Village with target Formation (within 3
Head groups months)
10. 9. Weekly 8. Loan 7. Loan 6.
Monitoring Group Utilization & Granting Inaugurati
& Meeting monitoring on of the
Evaluation Process Group
10. 1 10.2 9.1 sharing 9.2
Record Incentives, sessions
keeping rewarding for Savings &
good loan
repayment
performance
collection
Empowerment=Graduation as Member of CU(ownership)
mainstreaming have less ( E and L Poor) in the society.
9
ASSOCIATION OF ASIAN CONFEDERATION OF CREDIT UNIONS
ASSOCIATION OF ASIAN CONFEDERATION OF CREDIT UNIONS

10. The ownership context of Credit Unions
Owned, managed, controlled by members
Receiving
Financial
100%
Governance by services plus
members
Decision making
Membership at the AGM
Share
Selection of the
Credit Selection of
Board of Union Supervisory
Directors Committees
Members
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ASSOCIATION OF ASIAN CONFEDERATION OF CREDIT UNIONS

11. Organizational Structure with ownership representation
General Body
(Members)
Board of Supervisory
Directors Committee
Credit Education
Committee Committee
Other Other
Committee
Committee
Professional
Management
Staff
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ASSOCIATION OF ASIAN CONFEDERATION OF CREDIT UNIONS

12. Ownership - power Membership
 Suspend Board & sub-committees
 Appoint auditor
 Decide maximum credit limit
 Decide on borrowed capital
 Approve investment policies
 Bylaws and its amendments
 Business plan
 Strategic plan
 Approve the audit report
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ASSOCIATION OF ASIAN CONFEDERATION OF CREDIT UNIONS

13. Board Accountability to Ownership ???
 To ensure sound
management that is
compatible with the
socioeconomic interest
of present & potential
members.
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ASSOCIATION OF ASIAN CONFEDERATION OF CREDIT UNIONS

14.  Supervisory Committee-the security guard of
the credit union
• Supervision - audit of accounts
• Social audit-monitor plans & its
implementation, behavior of Board & staff,
compliance with policies
• Reporting of findings to Board and general
assembly
• Suspension in the event of misconduct and
violation of policies/code of ethics
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ASSOCIATION OF ASIAN CONFEDERATION OF CREDIT UNIONS

15. Q&A
Thank you.
www.
www.aaccu.asia
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ASSOCIATION OF ASIAN CONFEDERATION OF CREDIT UNIONS