Digital financial inclusion, especially for Asia, Africa and Eastern Europe is getting some technical assistance from the World Council of Credit Unions, which is the global trade association and development platform for credit unions worldwide. Since 1971 the WOCCU has implemented 300 technical assistance programs in 71 countries to build safe and sound financial cooperatives with affordable financial products and services.
Megan O’Donnell, vice president of financial inclusion, spoke at the Innovate Finance Global Summit (IFGS) in London in April. The IFGS is an annual event that explores the latest innovations in the financial technology sector and attracts dozens of experts from across the world to serve as speakers and panelists. The theme of IFGS 2019 was the value and purpose FinTech has to society.
Presenting one of the three FinTech pilot programs featured in the “Architects of the Age of Interoperability” panel discussion, O’Donnell shared her insights on how interoperability between digital financial services can be a key tool in delivering needed financial services to the under-banked.
“Being included in a discussion about the future of interoperability at a prestigious event like IFGS 2019 offered WOCCU a great opportunity to inform people about our work,” she said.
The panel discussion also featured Warren Carew of ModusBox —which helps organizations make the most of the Mojaloop platform, and Juliet Kiluwa from Financial Sector Deepening Trust, a partner in the recent effort to update the national scheme for cross-platform instant payments in Tanzania. The discussion was moderated by Kosta Peric, deputy director of the financial services for the poor program at the Gates Foundation.
O’Donnell oversees WOCCU’s Interoperable Digital Financial Services for Credit Unions project, recently launched in the Philippines and Indonesia. Using a grant from the Bill & Melinda Gates Foundation, the project is in the exploratory design phase—assembling a team of international experts to design an interoperable, open-loop, low-cost, real-time payment platform with the goal of connecting 40 million credit union members to digital financial tools. The goal is to create a system that can eventually be expanded across Asia.
“We are strengthening credit unions on their own and we work with international partners for credit unions working with the poor or in conflict areas which need support from the outside.”
On its web site, WOCCU says:
“We are a true innovation lab. We test technology. We are trying things out. We are running up walls, falling down, and running right back up and over them. Each of WOCCU’s field programs has a digital transformation component, and the DTL is a platform for us to share, vet and exchange learnings with our members and partners around the world.”
One challenge for credit unions is that they are small and can’t afford to develop technology like mobile banking, individually — they need to collaborate, O’Donnell said. “We want to create a set of tools and build the capacity starting in these two countries to do this digitization of transactions, loan payments, and sending money to your friends.”
The open source Mojaloop code, developed through funding from the Gates Foundation, could enable effective mobile banking systems. The credit unions have to get into mobile because unscrupulous operators are already there, pushing out offers of loans to mobile phones.
“It’s very sophisticated, and only some are legitimate. All kinds of things are being offered on your app and it is an alternative to the credit union. That is something we are trying to counter with digitalization so people don’t have to go to these other online sources.”
In Indonesia credit unions are often the only access people have to finance.
“By creating these digital connections, they can connect to the rest of the economy — pay taxes online, bill pay, financial information — and get away from bi-level economies where poor operate on one level…”
With 40 direct members and 40 affiliate members, it does advocacy, training and runs a development programs, such as a development lab in Ukraine to develop small business lending software.
WOCCU receives funding from a wide range of multi-lateral, government and private partners including USAID, the UN, and the World Bank. Its Worldwide Foundation for Credit Unions is all about financial empowerment through the credit union movement, helping credit unions solve issues to help them grow, strengthen and be increasingly accessible to their members and community.
WOCCU is headquartered in Madison, Wis. with an office in Washington, D.C.