Encouraging Congress to Continue to Find International Credit Union Development Projects

ENCOURAGING CONGRESS TO CONTINUE TO FUND INTERNATIONAL CREDIT UNION DEVELOPMENT PROJECTS -- (Extensions of Remarks - July 07, 2004)

SPEECH OF HON. MARCY KAPTUR OF OHIO IN THE HOUSE OF REPRESENTATIVES
WEDNESDAY, JULY 7, 2004

Ms. KAPTUR. Mr. Speaker, more than 85 million Americans are familiar with the benefits offered by credit unions of a safe place to save, a place to get a good deal on a consumer or home mortgage loan and solid advice on how to manage their families' financial affairs. However, not everyone in the world has the same advantage of being able to choose to save and borrow at a credit union as we do here in the U.S. The World Council of Credit Unions is working on USAID-funded projects on six continents to develop and strengthen credit unions in ten countries. Current development projects have already resulted in nearly three million credit union members who have saved $1.6 billion and received affordable loans up to $1.3 billion in a number of developing countries such as the Philippines, Romania, Ecuador, Guatemala, Poland, Uganda, Rwanda, Uzbekistan and Mexico.

I met recently with representatives from Mexico's two largest credit unions, Caja Popular Mexicana and Caja Libertad, men who spoke with me about how the World Council of Credit Unions, with funds from USAID and U.S. credit unions, has helped more than a million of Mexico's poorest citizens through access to the benefits of credit unions.
The World Council of Credit Unions, as part of the credit union system that includes the Credit Union National Association (CUNA) in the U.S. and its affiliated state credit union leagues, is working in partnership to close the gap between people of the world that "have more" with those who "have less." Today, 1.1 billion people on the planet "have more" and 5.2 billion "have less." By 2050, projections indicate that while the "have more" number will remain constant, those "having less" will rise to 7.8 billion people. This widening gap represents a security risk to the U.S. Credit unions can help alleviate this crisis.

The World Council of Credit Unions' Caja Popular Mexicana project is a $3.5 million four-year project funded by USAID's Office of Microenterprise Development. Since the project began in late 2001, membership in Caja Popular Mexicana has increased by more than 60 percent and loan delinquency decreased by nearly 70 percent, enabling more of Mexico's citizens to access the services of a safer credit union. The World Council of Credit Unions provides Caja Libertad in-house technical assistance to support the credit union's efforts to strengthen its operations, increase its outreach and better compete in the evolving Mexican financial market. Last year, Caja Libertad opened four rural microfinance branches to serve very poor women and strengthened its financial structure with increased provisions for delinquent loans.

Both of these credit unions are involved with the International Remittance Network (IRnet), an international remittance product developed by the World Council of Credit Unions. Caja Popular Mexicana began distributing remittances in August 2003 on a pilot basis and increased distribution to three hundred branches by November of last year. As of May 2004, more than fifteen thousand remittances totaling $6.6 million were distributed. The overwhelming majority of receivers are women, and most receivers are credit union members. Non-members are encouraged to consider taking advantage of the benefits of membership, and are joining at a rate of 5 percent per month. Caja Libertad is on target to begin distributing remittances through IRnet later this year.

Through IRnet, money is sent safely and affordably to friends and family members who use the remittances to pay for food, housing, education, to start new businesses and to save for the future. It is this last part that makes receiving international remittances at a safe and sound credit union so important. Receivers can safely and easily deposit a portion of the remittances into their credit union accounts. A new product being launched by one of these Mexican credit unions will mean a consistent remittance history is even basis for loan approval. Remittance distribution, through credit unions, is enabling the Mexican people to improve their financial standing exponentially.

I congratulate Caja Popular Mexicana and Caja Libertad for their successes in becoming safer credit unions reaching out to more of Mexico's poorest people, and thank them for traveling to the U.S. to share with my colleagues and me the importance of U.S. support of their projects. I encourage Congress, through USAID and other avenues, to continue to fund international credit union development projects that promote the credit union ideal of "people helping people to help themselves," and encourage the World Council of Credit Unions to continue its important work of making credit union membership available throughout the world, especially to those in underdeveloped countries.