On the surface, credit union managers Aurea de Ramayo and Alice Kosgei share little in common. A teacher and principal by trade, Aurea came to be the general manager of her credit union in the southern Philippines because "nobody else wanted the job." Ten thousand kilometres away, in Kenya's Rift Valley, Alice grew into her role, working her way up from clerk - her very first job - to the top post at one of Kenya's most successful savings and credit co-operatives (credit unions).
A closer look reveals what powerhouse individuals these two women are. They recently crossed paths in Ottawa, where they joined twelve other women credit union managers from six countries to learn about Canadian credit union policies and practices as participants in CCA's Women's Mentorship Program.
|Women`s Mentorship Program 2011 participant Aurea de Ramayo speaks to the group during classroom training in Ottawa.|
"I really want to learn how Canadians reach out to so many people," says Aurea. "What they are doing that we can replicate in our co-op." Aurea will have the chance to do just that during her week-long mentorship at First Ontario Credit Union in Hamilton, Ontario.
A self-defined risk taker, Aurea heads a school that is a subsidiary of Cordova Multi-Purpose Co-operative. It encompasses a credit union and school, a small retail grocery store, a construction supplies store, a Health Plus franchise selling generic medicines, and a funeral co-op. Cordova's 933 members will soon celebrate 40 years of credit union service. Twenty-four years ago, no one would have expected the co-op to survive another month.
"I've seen a dying co-op," explains Aurea. In 1987 she was invited to what was to be its last board meeting before closure. The credit union was struggling with a 95 per cent rate of loan delinquency.
"Nobody wanted to run it anymore," she explains. "Had it not been for the school, the co-op would have been closed because of net loss and mismanagement. At the meeting they asked me to take over as a volunteer manager. I said yes."
"After our debts, we had only the cash on hand," Aurea recalls. "The rest of our assets were lent out and no one was paying back their loans. With only 300 pesos (about $60) on hand we began carolling door-to-door to our members, asking for deposits, for loan repayment and for support." In one week, Aurea and her team raised 3,000 pesos by literally singing for their survival.
"We called on members to start taking loans with that 3,000 pesos," says Aurea. "The condition was that they pay one peso each day for the old loan, and two pesos per day for the new loan." Gradually, Aurea wrestled the delinquency rate down to 40 per cent. Today, Cordova Multi-Purpose Co-operative is a model credit union. Still, Aurea says she wants to reduce the rate to 10 per cent and find new ways to run Cordova's loans program "that will strengthen, not weaken our credit union."
"I really find how you deal with your savings very interesting," she says. "It's the opposite of what we are doing in our country. When members take loans, they cannot take all their deposits. The more you save the more you can borrow. In my credit union, members can borrow up to five times their savings."
Managing risk, loan delinquency, prudential standards and mergers head the list of what Alice Kosgei wants to learn during her own placement with SERVUS Credit Union in Edmonton, Alberta.
Like Aurea, Alice has seen a dramatic turn-a-round at her credit union, which serves tea growers, dairy farmers, factory workers, school employees and sugar cane farmers.
"In 1993, when I first worked at Kenya Highlands Savings and Credit Co-operative (SACCO), we had only a few members and gave out small loans. Our loan delinquency rate was 70 per cent."
|Alice Kosgei takes in a workshop during training in Ottawa.|
As Alice moved up through the ranks ̶ from bookkeeper and loans clerk, to loans manager, manager, general manager, and then, two months ago, to chief executive officer ̶ the SACCO improved its loans program and collections rate. It now has 34,000 members, a delinquency rate of 0.5 per cent and pays out the highest dividends of any SACCO in the country.
Alice says the journey wasn't easy. Her SACCO continues to cope with illiteracy and loan delinquency. "We should have a zero delinquency rate," says Alice.
Controlling loan delinquency is an ongoing preoccupation for many of Kenya's 12,000 SACCOs. Members at Kenya Highlands can borrow up to three times their savings. And, at ten per cent, annual inflation is an added problem.
"Buyers purchase tea from growers at monthly auctions, holding back a percentage of the price which they then pay out as a bonus at the end of the year," says Alice. "The SACCO takes back 30% of each month's tea revenue for its loans, which, except in times of drought, are usually cleared off at the end of the year."
This spring, Alice's co-op changed its name from Kericho Tea Growers SACCO to Kenya Highlands SACCO, and partnered with the Cooperative Bank of Kenya to link to their ATMs. Members can now make deposits and withdrawals anywhere in Kenya.
"Our vision is to serve Kenyans all across the country," says Alice. "I want to find products I can take back to my SACCO to help us serve our members on a national scale."
Aurea and Alice are both devoted to achieving the highest standards of excellence at their credit unions.
"I am so happy, because I've achieved what I wanted: to be the leading SACCO in Kenya," says Alice. "And we are."
She has cause to be proud. The Co-operative Alliance of Kenya named Kenya Highlands SACCO the best-managed SACCO in the country during last year's International Credit Union Day celebrations.
Alice and Aurea tell International Dispatch what ideas they will take home from their Canadian mentorships in next month's issue - Editor.