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Bringing Financial Access to Rural Poor in Mexico and Worldwide
Monday, July 7, 2014 6:25 AM

Semilla Cooperativa
At a Semilla Cooperativa session in rural Mexico, credit union field officers collect savings from members using PDAs and provide receipts with mobile printers.

Imagine living in a world where you have no access to a loan or a secure place to keep your savings. The nearest financial institution is 10 to 25 miles away, and the banks will not help because you do not have any credit history or enough assets to be considered worth the expense of rural finance.

Beginning in 2004, the World Council of Credit Unions sought to address this very issue in rural Mexico.  Through funding from the Mexican government and national development banks, WOCCU initiated a technical assistance program to help credit unions improve performance and empower rural communities.

“The cost of building a credit union branch office is a very expensive endeavor, especially for sparse rural populations in marginalized areas of the country,” says Matt Garcia, WOCCU project director. “WOCCU created a model that allows credit unions to expand financial services to these areas through more affordable investments in personnel and technology.

According to Garcia, this Semilla Cooperativa [cooperative seed] outreach methodology literally transports the knowledge and access of financial services into rural areas previously inaccessible due to high costs, high risks and minimal return. The model has gone through a rapid evolution over the course of three rounds of projects in Mexico.

The first phase of development was relatively rudimentary, he explains. Credit union field officers traveled by motorcycle to remote communities to provide financial education to small groups, disburse small loans, collect payments and savings deposits and provide handwritten receipts. The second phase transferred the methodology to the 21st century. World Council created a value chain of technological devices to further minimize costs—ATMs were implemented in population dense areas, point of sale (POS) devices were placed in local village stores to increase access and reduce risk of theft for credit union representatives, and credit union field officers used personal digital assistants (PDAs) in the most rural areas of the country. The current third phase incorporates mobile banking in addition to the other technological advances. 

“The development of Semilla Cooperativa has literally transformed the lives of Mexico’s rural poor by providing 24-hour financial access to a population that previously had none at all,” Garcia says. “Over the course of the three projects, WOCCU has brought more than 1.3 million members to the country’s credit union system.”