A February visit to credit unions high in the Andes Mountains of Ecuador proved quite eye-opening for some members of the Iowa Credit Union League (ICUL).
“International exchange provides an enlightening experience that often challenges our previously held notions of the reality for credit unions in other countries. Our visit to South America was no exception. Despite the challenges facing Ecuador, our colleagues from Iowa encountered technologically-advanced credit unions using artificial intelligence (AI) to help build membership and improve decision-making about lending risks. That was an experience they probably weren’t expecting,” said Thom Belekevich, World Council of Credit Union’s (WOCCU) Learning and Education Program Manager.
Belekevich organized the engagement trip to Ecuador for seven ICUL members as part of a WOCCU Credit Union Study Tour.
That brush with AI-driven development and lending practices came on a Feb. 12 visit to Cooprogreso, the fourth-largest credit union in Ecuador. It serves more than 214,000 members, with assets supassing $491 million at 26 branch locations throughout the country.
Realizing many potential customers didn’t have easy access to any of its physical branch locations, Cooprogreso in 2015 launched a three-year program to digitize every aspect of its member services.
That investment has paid astounding dividends. Cooprogreso’s membership has doubled since the digital upgrade was completed. People who didn’t live near a branch location were able to open accounts and secure loans simply by using their mobile phones.
With more members using digital services, Cooprogreso had more access to data as well. That allowed them to target programs and messaging more effectively—and even analyze member risk more thoroughly—making the entire loan application process much quicker.
“It was a great way for the contingent from Iowa to ask questions about whether their own use of data could be improved and expanded to help members,” said Belekevich.
Never too big to be a true “cooperative”
Two days later, the group traveled further south to Paute—a rural village largely destroyed by flooding in April 1993. But out of that devastation arose Cooperativa Jardin Azuayo—a credit union started in 1994 by local residents who recognized the importance of reinvesting in their community.
25 years later, Jardin Azuayo is the second-largest credit union in Ecuador, with over 400,000 members and assets of $835 million.
But despite that size, Jardin Azuayo still has a unique governance structure that allows them to stay very strongly connected to the local communities they serve.
Each branch location represents several neighborhoods. In each of those neighborhoods, members come together to elect an assembly of representatives at the “branch” level. Each branch then elects representatives to serve on a “regional” assembly. Those regional assemblies then nominate members to serve on Jardin Azuayo’s Board of Directors.
“As credit unions grow, it can be a challenge to maintain a personal connection with members. Jardin Azuayo’s system of governance ensures that members voices are present at all levels of decision-making,” said Belekevich. “It is really amazing to see such passionate people living and breathing that cooperative philosophy.”
That governance structure allows for each branch to identify the needs of its members. Often the need is for other cooperatives than can expand economic opportunity. In Paute, Jardin Azuayo brought 10 families of herb growers together to form a cooperative, so they could process and commercialize their crops more effectively.
Anita Martinez, the matriarch of one of those families, welcomed the Iowans to her farm and explained how the success of the cooperative has allowed her to work from home, which permits her to care for her elderly father.
“She was so proud to welcome a group of Americans into her home. It was emotional and inspiring to see how the credit union movement had made it possible for Anita to live with dignity. Several of our Iowa guests were moved to tears,” said Belekevich.
That experience served as a reminder that—even in this age of consolidation—it’s important for credit unions to foster a relationship of coop and member, instead of business and client.