The Cooperative Compass

ACCUs Experience in
Building Sustainable savingsled Financial Institutions In
Myanmar

Our Network & where we work

47 Million Individuals, from 34,679 CUs in 22 countries in Asia

Credit Unions a Global Network

World Council of Credit
Unions
Asian Confederation of
Credit Unions
National Federations of
Credit Unions
Regional Leagues or
Chapters
Primary Credit Unions
Individual Members

International

In-country

ACCU
We
areistthe
he regional
global

Trade
Associat ion

Development
Agency

Foundat ion

Digit al Financial
Services Gr oup

for CREDIT UN ION S

Our mission is to improve lives of people through credit
Our mission is to improve lives through credit unions.
unions.
We believe that all people have the right to quality

Our vision is integrated and sustainable credit union

networks in Asia.
Our vision
through the global credit union community.

There is a connection
between poverty and
dependency.
In order to fight poverty one
should fight dependency first.

3 'S' formula:
self-help,
self-governance and
self-responsibility.

Co-operative DNA

Business with a wider

Social Engagement

Credit Union Mission

The credit union provides vehicle; the
members use it to arrive at their financial
destination.

Credit
Union

The Credit Union Role

Enters into the
financial lives of
members to guide
them in fulfilling their
life goals and
aspirations.
Becomes the trusted
wealth creation
advisor for members

Responsible Lending
Help is required under any circumstances for
members who offer the necessary guarantee
for good use of the money they want to
borrow. Guarantee is made on the evidence
of sound personality, the reliability of their
character and a serious effort to work their
way up.
F.W. Raiffeisen

People life
goals fulfilled

Socioeconomic
empowerment
of People

National gross
happiness

Project Result as of October 2016

No. of Savings and Credit Coops
No of Members

36
15,938

No. of Women Members/Savers

57%

Operation in rural areas

97%

Savings Mobilized Kyats

331,142,098

Members with Loans

Outstanding Loans
Total Loan granted as of Kyats
Organized Federation of SCA

8,829

529,531,420
1,924,111,300
1

Project Result as of Sep 2016 SCC 36

State/Region Bago

Name of
township
Daik-U
Kawa
Letpadan
Nattalin
Nyaunglebin
Oak Pho
Paungde
Phyu
Pyay
Pauk Khaung
Shwe Taung
Watt Htee
Kann
Waw

State/Region Ayeyarwady

SCCs
1
2
2
1
1
3
2
2
4
1
1
1
1

Name of
township

SCCs

Dedaye

Hinthada

Kangyidaunt

Kyaiklat

Kyonpyaw

Myaungmya

Thabaung

Wakema

Yegyi

Zalun

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
of money, to improve the moral
and physical values of people,
and their will to act by
themselves.
- Raiffeisen
Hermann Schulze-Delitzsch and
F. W. Raiffeisen in Germany

The difference between wealth and income

INCOME

WEALTH
EXPENSE

Most Financial Institutions focus on income (a flow)

instead of on building wealth (a savings).

Financial Market Outreach

Rich
10%

Multi-national, Government,
Commercial Banks

Upper Income
10-15%

Government, Commercial,
Development Banks

Middle Income
20-25%
Poor

Laboring & E-poor 30%

Ultra Poor 15-20%

Development Banks, MFIs,

Credit Unions

NGOs, Moneylenders,
Relatives, ROSCAS only 30%
Money lender Credit Unions
Money Lenders & relatives

Product Positioning
Product Positioning Map for CUs
Segmentation of the Market in community

Salary
Earners

Religious
Groups

Youth
& Children

Retirees

Businessman
(Entrepreneurs)

Housewives

Students
Primary/
University Farmers

Low
Income
Professionals
Unemployed

Our innovation in the Microfinance is.

Approach on group network

Group Level

SHG Level

Organizational Structure: owned and managed by members

Membership

General Meeting

Board of Director

Credit Committee

Supervisory Committee

Education Committee

Savings Accounts

Savings Accounts: (Income Savings = Expenses)

Shares = Kyats 500/week - non-withdrawal unless resign

Capital build up Savings - savings could be withdrawn in case of

emergency 50%. Per week Kyats 500

Voluntary savings: can be withdrawn any time, one time per month

Term Savings: Could with withdrawn after maturity. If anyone wants to

withdraw before maturity, at least 7 days notice is required. Terms are 3, 6
and 12 months

Youth bee Savings: Children saving at school

Loan program

Loan program : (Income Savings = Expenses)

Production Loan only eligible after 12 weeks

Kyats 1st

45,000 ; 2nd 60,000; 3rd 90,000; 4th 120,000

Providential Loan only eligible after 6 month weeks

Kyats 20,000 It could be increased gradually based on

capacity of SCC

Capacity-Building Activities

Promotors Seminar on SCC

Organizational and Management Training SCC

CUBIS Computer User Training

Leadership Training

Marketing Training

Advance Skill Training Account and supervisory Committee

Training on Accounts and Bookkeeping Training

PEARLS Monitoring Training

Training on Cooperative Governance

Village Motivational Meetings

Financial Literacy Training

Exit strategy: The project's exit strategy is to handover to a

well-functioning second tier of Savings and Credit
Cooperatives by the end of 2016

Strategic Issues on Mobilizing savings

Lack of cash savings value in community

Lack of Institution for small savings

Cost of collecting small savings

Cost of educating communities on the value of savings

Competitors' easy credit disrupting savings promotion

Lack of long-term vision of the institution

Lack of HR to train people on Financial Literacy

Lack of trust on cooperatives

Bad experience in the past on cooperatives

Lack of transparency

Lack of good Governess in cooperatives

Lack of supervision in cooperatives

Strategic Issues building coops

Trust on cooperative Governance
Lack of commitment on cooperatives

Low population density in rural areas

Lack of trust for cooperative and leadership.
Politically Motivated Loan Program
Village level revolving loan
Competent Manager

Conflict with in board and manager

Enhancing Cooperative Movement in Myanmar to

Expand Financial Exclusion

Shift to two-tier cooperative federation

Sustainable volume of business (economies of scale) for primary financial

cooperatives

Performance standards for financial cooperatives

Exposure program to COOP Regulators to Korea in Sep 2016

Coops Regulators Policy advocacy - National Seminar on Financial Inclusion

Upholding Socio-economic Development of People through Savings & Credit

Cooperatives for Inclusive Finance in Myanmar - November 10 to 11, 2016

Risk-based supervision

Develop a strong national federation of financial cooperatives

Promotion and development of financial cooperatives

Future of Savings and Cooperative

200 SCC Affiliation to the Federation

Link the cooperative federation to ACCU and

International coops
Provide Training to Regulatory Body on Coops
Institutional development
Implement coop development project

How to be a savings-led organization?

Organization's value self-help- where people can
chart their own destiny
Market segmentation L: Poor and E: Poor
Focused on improving lives of members - achieving
financial independence and not dependency

Program on Savings and Credit plus education

Education for members to change their Financial
Behavior

Lessons Learned
People can save small amounts of money, but regularly
People can pay their loan on time
People can be trusted, they only need opportunity
Transmit the culture of taking responsibility of their financial
future

Change financial behavior when Savings is building up SCCs

Community leaders should have real commitment to build their
SCCs
Provide access to credit within the community

Lessons Learned
It should be treated as business and social responsibility
Resources could be mobilized within the community

Training and Education is critical to growth and

sustainability
The potential for savings and credit cooperative
membership in Myanmar can reach millions
Built the sense of ownership of the community

Professionally managed to be efficient

Challenges
Perception of people on easy credit
People has no habit of thrift myth poor cant save

It takes more than small credit to sustain the operation

of SCC
Capital infusion is needed but without undermining
self-help
Federation of SCCs should be established with the role
of strengthening & promoting SCCs
It takes time to change peoples mindset

Challenges

No regulatory back up to ensure the prudent

management of SCCs
The microfinance model ignores the crucial
importance of solidarity and local community
ownership and control
The microfinance model is pre-programmed to
precipitate a sub-prime-style over-supply

How to be a savings-led organization?

Organization's value self-help where people can chart
their own destiny
Focused on Improving lives of members - achieving
financial independence and not dependency
Program on Savings and Credit plus education
Education for members to change their Financial
Behavior
Market segmentation L: Poor and E: Poor

What is the role of MicroLead in future?

Co-operatives can be significant economic players

that contribute to sustainable growth processes
Recognized cooperative approach as powerful
model for poverty reduction
Continue the project with ACCU in the next three
years

UN Capital Development Fund

THANK YOU