VANCOUVER, B.C.–Examples from around the globe of the innovative ways credit unions are expanding financial inclusion were highlighted by NCUA Board Member Rodney Hood here.
Speaking to the World Credit Union Conference, Hood noted that financial inclusion has been a priority of his while on the NCUA board, including while he was chairman from 2019-21, and said “it’s a topic I could talk about all day.
“When we met last summer in Glasgow, Scotland – almost a year ago to the day – I provided a relatively comprehensive overview of my thinking on financial inclusion; why inclusion needs to be a priority for the financial services industry, and, of particular importance, how credit unions and other cooperative finance institutions play an essential role in bringing more people into the mainstream of financial services,” Hood stated. “I spoke also of how prudent regulatory reforms and careful integration of fintech could help to bolster your institutions’ efforts to widen the circle of financial inclusion.”
A ’Different Tack’
In his remarks to the 2023 event, Hood said he was seeking to take a “different tack” to share concrete examples of work being done by CUs around the world on financial inclusion.
“I’m not sure we need to make the case for the ‘why’ of financial inclusion – but we do need more focus on the ‘how’,” Hood said.
Among the examples cited by Hood:
- Columbia. Hood pointed to a credit union that was seeking to improve service to rural areas, so it pioneered a corps of “field officers” comprised of credit union employees who would travel by motorcycle with iPads to provide service to members who lacked internet connections.
- North Macedonia. Hood cited a credit union that launched a microlending program for farmers using mobile technology. “But they faced a hurdle with the farmers were reluctant to embrace smartphones and apps,” Hood said. “So they provided them with iPhones equipped with weather apps to help the farmers better manage their crops, which helped the farmers to better grasp the power of these tools, and paved the way for more connectivity through mobile services.”
- Kenya. Hood said he has been told of a credit union that is deploying drones to assess activity in far-flung agricultural areas. “The drones allow them to view properties and crops when underwriting loans, so they can assess production, determine damage after severe weather, and other uses,” Hood said.
- Ukraine. Even with the war going on, Hood said the country’s CUs have been working to modernize and expand their digital services to be more competitive in the financial services market and to attract more young members.
- Guatemala. In Guatemala, Hood cited a credit union that has established a CUSO to enable them to lend to small- and medium-enterprises. “In that case, the credit union was able to open up new avenues for investment in local economies, while expanding financial access to entrepreneurs,” Hood told the meeting.
Not An End to Itself
“What I want to emphasize about all of these examples is that they show how technology is being extended not simply as an end in itself, but as a way to better connect credit unions with members and communities, and as a way to expand access to financial services to marginalized and under-served communities,” Hood said. “This is technology with a true social purpose. I really think this gets us back toward the original promise of what these technologies were supposed do achieve, and I hope we see many more such cases in the future.”
When it comes to financial inclusion, Hood said there is “no magic bullet” solution and that a variety of approaches tailored to the realities of different geographic regions, different demographic populations, different economic circumstances, are needed.