Credit unions play a key role in international development as promoters of affordable financial services. This role is particularly important since, despite considerable progress in recent years, over 1.7 billion adults worldwide remain unbanked. Inequalities are also sharp, with women in developing countries being 9 percentage points less likely than men to have an account.
The World Council of Credit Unions (Woccu) has been working internationally for decades to champion and grow credit unions and co-operative finance. Since 1971, it has implemented over 300 development projects; but how are these projects different from other international development initiatives?
“The public or philanthropic resources that are made available for financial co-operative and credit union development generate positive impacts and results for millions of people,” says Angelina Tracy, Woccu’s vice president of strategic growth and partnerships.
“Credit union development is locally led at its core. It is not traditional foreign aid; it represents a private sector approach that combines business discipline while making people’s money work for them.”
These development aid projects have enabled Woccu to leverage millions of dollars of private capital through credit , adds Tracy.
The projects have also increased the incomes of individuals, created jobs, supported local economies and delivered what has become a global movement of self-sustaining, local financial institutions.
Recent examples include its work in Ukraine, which started nine years ago and focuses on expanded access to credit union financing, particularly for farmers and small businesses.
“Thanks to our work, Ukrainian credit unions have extended over 20,000 agricultural loans totalling over US$26m – over 4,000 of those loans disbursed in wartime,” says Tracy.
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“While the sector may be small, serving just over 200k members and $32m in assets, it plays an outsized role in small towns and especially for returning veterans and women, many of them widowed or left to fend for their families alone. Historically, every $1 invested has generated $4 in return.”
Woccu has also been active in the Global South, which, Tracy says, will remain a focus for the organisation in the future, with projects in Kenya, Peru and Ecuador.
In Kenya, Woccu has been supporting savings and credit co-operatives (saccos) to help them leverage the strengths of the co-operative model while adjusting their strategies, staff capacities and operations to the needs of SMEs. The project has had some positive results: the saccos were able to increase their SME portfolios by 4x the investment made and bring non-performing loans (NPLs) in Kenya down from over 20% to under 1.5%. Additionally, 46% of borrowers have been women.
In Peru and Ecuador, Woccu has worked with a network of 60+ partners and allies to support the socio-economic integration of Venezuelan migrants and low-income Peruvians and Ecuadorians. Through the projects, 12,591 nano-entrepreneurs and small sustainable businesses were launched or strengthened.
“In 2024, we completed an Integration Study,” says Tracy, “which showed that Venezuelan migrants who have participated in this development programme were more integrated into their host countries than those who had not. And more than 95% of EIP’s Venezuelan migrant and refugee beneficiaries were planning to remain in their host country and have established roots in Peru and Ecuador, reducing further migration.”
For each project, there were several challenges along the way which were addressed by having mitigation plans outlining potential risks and mitigation measures for institutional capacity, governance, political, social and environmental factors, among others.
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Tracy gives the example of Ukraine, where “it took longer than originally expected for the legislature there to pass an updated national law on credit unions, which expanded the ability of credit unions to serve additional members.”
The termination of USAID awards that funded Woccu projects in Ukraine and six other countries was another big blow.
Woccu also partners with the Worldwide Foundation for Credit Unions (WFCU), using its technical and project management resources to fund projects like those in Kenya, Guatemala and Ukraine. To help raise funds, WFCU launched its Rally the Movement campaign earlier this year, focusing primarily on projects in these three countries – which, says Tracy, “represent strong Woccu membership, a commitment from individual credit unions to innovate and have all experienced the abrupt disruption of activities that had been previously launched over the past year or so.”
WFCU, which also provides leadership opportunities to women and young credit union professionals and international education opportunities and accreditation for credit union professions, uses the funds it raises directly from credit union sector supporters to provide disaster relief to credit union partners through its Project Storm Break initiative.
The campaign was designed as a crisis response to the termination of USAID awards, says WFCU president Mike Reuter.
“WFCU continues to partner with Woccu on international credit union development and advancing financial inclusion through credit unions,” he adds. “WFCU accepts donations from individuals and institutions alike to continue this critical work.”
Another area of work is climate adaptation finance, with Woccu receiving a Challenge Program for Adaptation Innovation award in November 2024 from the Global Environment Facility. With credit unions in the West Africa Monetary Union (WAMU) reaching over 18 million members, often in rural and climate-vulnerable communities, Woccu aims to introduce a methodology for managing climate risk and offering climate adaptation finance. Through the project, credit unions in the WAMU will receive access to user-friendly digital tools from Yapu Solutions to assess climate risks and monitor investments, backed by technical support, performance-based grants and data-driven strategies.
In terms of plans, Tracy says Woccu’s goal for development assistance remains the same “providing effective technical assistance to support the growth of our member credit union networks, particularly in the Global South”.
“Our focus is allowing our member networks to innovate and grow their financial services and products, leveraging transformational public-private partnerships.”
