Education Fosters Ethiopian Credit Union Growth

GANTA AFESHUM, Ethiopia — Redai Halefom, a development agent assigned by Ethiopia’s government to educate farmers in the northern region of Tigray, concluded his open-air presentation on ways to fatten the native cattle so they would sell at higher prices. Smiles and nods from his class of 20 — both men and women — let Halefom know that another group of Ethiopia’s subsistence farmers had taken a few more steps to ensure their food and financial security.

The farmers are members of Sasun RUSACCO — literally “rural savings and credit cooperative,” or credit union — and are required to attend farming as well as financial training as part of their RUSACCO membership. Sasun is one of a growing number of RUSACCOs taking advantage of a World Council of Credit Unions (WOCCU) program funded by the U.S. Department of Agriculture (USDA) to improve the lives of its farmer-members.

“The Ethiopian model focuses on ‘back to the basics’ educational development,” said Stanley Kuehn, WOCCU’s program director in Ethiopia. “We’re not introducing new crops, but instead providing greater access to credit so farmers have the resources they need to increase their yields, improve their finances and feed their communities.”

WOCCU’s program, funded by the monetization of 23,000 metric tons of wheat provided by USDA’s Food for Progress program, already has taken root in the northern Tigray region where 89 RUSACCOs are participating. WOCCU is currently expanding to RUSACCOs in the Amhara and Oromia regions as well.

The program’s goals are to provide technical training that will help turn subsistence farmers into commercial producers, expand agricultural finance products to meet growing farmer-member demand and improve community infrastructure to support agricultural production and marketing, according to Brian Branch, WOCCU president and CEO.

“Ethiopia has an extensive credit union system already in place that is able to serve members in remote rural areas,” Branch said. “By strengthening that system through member education and increased resource availability, we hope to help raise the levels of credit union service to improve food security for communities and financial wellbeing for members.”

According to the U.S Department of State, 85% of Ethiopians rely on agriculture as their primary income source, which accounts for 46% of the country’s gross national product and 80% of its exports. Frequent drought in the mostly arid north, unsustainable agricultural practices and poor infrastructure have hampered farmers’ abilities to meet a growing demand, causing nearly 60% to fall below even their own subsistence needs.

Ethiopia’s nearly 8,000 credit unions, many of which serve less than 100 members, comprise a movement that is now more than 50 years old. The government currently mandates that each kebele, or community of roughly 2,000 households, has its own RUSACCO, but since the credit unions’ capital strength is based on member deposits, institutional growth has failed to keep up with loan demand among their farmer-members. Funding from WOCCU’s program helps them provide greater loan access to members, while additional financial education and mandatory member participation in a RUSACCO savings program has strengthened the financial stability of the RUSACCOs themselves.

Kuehn said the program conducted diagnostic studies on the RUSACCOs to determine areas where greater financial education and agricultural training are needed. “Our hope is to create an effective model that further involves the Ethiopian government in practical training and education of its people,” he said.

Early results from the WOCCU program, aimed at providing finance and agricultural training to some 16,500 farmers, have been positive. Berihun Gebreyohannes, a member of Sasun RUSACCO in Tigray, is one farmer who has benefitted from the program.

Gebreyohannes works closely with Halefom, who advises him on his small herd of four livestock. The farmer recently borrowed 9,000 Ethiopian birr (about US$525) to purchase a second ox, enabling him to plow and plant a half-hectare of cabbage and prepare another half-hectare for potatoes. Proceeds from the sale of his vegetables and dairy products produced by his two cows will help support his family of five.

“I want my children to go to school and have a better life than I did,” Gebreyohannes said. “I couldn’t do that without a loan from my credit union.”

World Council of Credit Unions (WOCCU) is the global trade association and development agency for credit unions. WOCCU promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. WOCCU advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions’ financial performance and increase their outreach.

WOCCU has implemented more than 275 technical assistance programs in 71 countries. Worldwide, 53,000 credit unions in 100 countries serve 188 million people. Learn more about WOCCU’s impact around the world at

Contact: Mike Muckian
Organization: World Council of Credit Unions
Phone: +1-608-395-2080

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