MICROCAPITAL STORY: Credit Unions in Ecuador Launch First International Shared Branching Network, Expand Global Microfinance Industry

World Council of Credit Unions (WOCCU), supported by CO-OP Shared Branching’s technology and partners from Colorado and Ecuador, successfully launched the first international shared branching network in Quito, Ecuador. The new network, called COONECTA, connects credit union members via direct transaction capabilities in the United States and Ecuador, providing the more than 2 million Ecuadorians living and working in the United States with affordable access to their credit union accounts back home, as well as offering U.S. visitors to Ecuador the same convenience.

World Council of Credit Unions (WOCCU) is a leading trade association and development agency for credit unions worldwide, providing its members with technical assistance and other development-related services. Its members include regional and national credit union associations, and financial cooperative associations from 65 different countries. According to its 2006 annual report, WOCCU’s 19 technical assistance programs in 15 countries served 4.1 million credit union members. It reports total assets of USD 15.9 million and net assets of USD 3.9 million. WOCCU is currently led by Gary Plank, chairman and Pete Crear, president.

CO-OP Shared Branching recently combined operations with Credit Union Service Corporation to become the largest shared branching network in the United States that represents eighty percent of national credit union members.

Credit unions are nonprofit cooperative financial institutions originally created in the 1800s for the purpose of serving the financially marginalized population. Members of a given credit union pool funds to provide various types of financial services, such as microloans, at affordable rates. Credit unions are usually organized to serve a particular community, group, or organization. There are more than 46,000 credit unions in 97 countries worldwide that serve approximately 172 million members.

Shared branching, a cooperative service whereby credit union members can conduct transactions at a location other than their credit union, has been active with Ecuador since 2005 through the Ecuadorian network Red Transaccional Cooperativa (RTC). Its internationalization is made possible by credit-union owned and designed technology powered by CO-OP Shared Branching’s proprietary Next Generation Network (NGN). Currently, 13 Ecuadorian credit unions with 154 service contact points connect with almost 3,000 U.S. credit union contact points. The NGN technology may be used to expand the international shared branching network to other countries.

Aside from those mentioned above, other organizations critical to the effort include SwissContact, a Switzerland-based development organization founded in 1959; U.S. Agency for International Development (USAID), a U.S. foreign assistance program that provides international economic and humanitarian assistance; Colorado Credit Union Association, a statewide trade association representing 144 Colorado credit unions and more than 1.5 million credit union members; affiliate Credit Union Service Network, a shared branching network representing credit unions from 38 states; and Multisoft, an Ecuadorian software development company established in 1990.

By Mary Fu, Research Assistant

Additional Resources:

World Council of Credit Unions, Inc. (WOCCU): “U.S.-Ecuador Partnerships Enable First International Shared Branch Network Exchange”

WOCCU: “About Us”

WOCCU: “2006 Annual Report”

ACCION: “Glossary of Microfinance Related Terms”

Global Envision: “The History of Microfinance”

SwissContact: “About Us”

Colorado Credit Union Association

Credit Union Service Network: “Policies and Procedures”

American University: “Software Development”