A World Council of Credit Unions’ (WOCCU) pilot program is allowing hundreds of Venezuelan refugees living in Colombia to access savings and loans for the first time since fleeing a series of political crises in their home country.
A donation from Financial Center First Credit Union through the Worldwide Foundation for Credit Unions helped to pay for the pilot, which was developed in the Colombian departments (states) of La Guajira and Arauca.
A recently-completed WOCCU project in the same Venezuelan-border region led to more than 250,000 Colombian residents gaining access to financial services. Some of the same methodologies are being utilized as part of the pilot—but this time, for both Colombians and Venezuelans.
WOCCU is once again establishing Self-Managed Local Savings and Credit Groups to promote financial inclusion in the region. Under this methodology, groups of people organize themselves voluntarily and meet periodically to invest their savings in a group fund. Members can then access loans from that fund out of necessity or opportunity. The groups also promote access to basic financial services, and a culture of savings and payments—helping to mitigate their risks and vulnerability by reducing fluctuations in the economic cycles of their families.
25 savings and credit groups have been established under the pilot—serving more than 400 Venezuelans and Colombians.
Financial and social cohesion
The pilot has not only led to greater financial inclusion and education, but also to more social cohesion among Venezuelans and Colombians.
Melvin Mogollon—a member of the "Los Luchadores" savings group in La Guajira—left Venezuela in 2018. He says belonging to the group has taught him how to save money and better relate to the people in his Colombian community.
"It is a new beginning that will allow us to fulfill many dreams despite not being in our country. The financial education has opened the doors for us to save,” said Mogollon, a microentrepreneur.
The pilot program has allowed savings and credit group members to:
- Access basic financial services.
- Save money to establish or grow businesses.
- Obtain small loans for emergencies, purchases and business investments.
- Responsibly manage their credit.
- Strengthen the social network in their communities.
- Become introduced to formal financial institutions.
“We see these savings and credit groups as a great first step for their members. As a second step, we worked with field promoters from two financial institutions—allowing them into the groups to help the people ‘graduate’ and gain access to Colombia’s formal financial system. This will ensure the availability of more and better financial services, and the sustainability of the pilot efforts,” said Oscar Guzman, WOCCU’s Regional Director for Latin America.
World Council continues to look for other opportunities to deliver financial services to more Venezuelan migrants in Colombia, Ecuador, Peru and other countries.
Los Luchadores savings group meeting in La Guajira.