The Voice of Canadian Credit Unions
Community Development / Human Interest /  •

Around the World in 70 Years

The Co-operative Development Foundation of Canada, which nurtures credit union growth around the world, celebrates its 70-year anniversary - and officially amalgamates with its long-time partner, The Canadian Co-operative Association.

In 2016, the Co-operative Development Foundation of Canada (CDF) invited Emily McCance, a liquidity manager for Central 1 Credit Union, to Uganda for a month to help revive the country’s struggling credit union system. One of McCance’s colleagues was Emmanuel Darko, the retired manager of the Ghana Association of Credit Unions (CUA). Having worked with the CDF in various capacities since 1991, Darko’s successful track record made him a valuable member of the three-person Ugandan revitalization team. Darko and his previous CDF-sponsored group had successfully employed cooperative methodology two decades earlier to rejuvenate the Ghanaian credit union system. In only six years, their mentorship influenced a growth in credit unions to 240 institutions from 146 and lifted member savings to $25 million from $4.2 million.

Similar to Ghana’s challenges, neither regulations nor custom encouraged Ugandan credit unions to hold deposits in a central reserve fund. Even if they had, most held very few member deposits anyway. Here, loans triggered membership, not savings, and credit unions were largely dependent upon outside income sources. The system was unsustainable but the relationship between credit unions and the country’s weak central wasn’t conducive to building liquidity reserves in the way McCance was accustomed in Canada. Thus, a diverse team of consultants was essential.

A Sierra Leone credit union teller updates a member’s account book.

Because Darko and his colleagues were at the CEO level, “just like a CEO here in Canada, they didn’t know the nitty gritty of how to write a liquidity policy,” says McCance of the three-person team. “I was the technical expert but they could critique what I was proposing and help me understand how to apply it in this region.”

McCance’s experience is illustrative of the CDF’s philosophy over the past seven decades: share Canadian know-how but apply in a culturally appropriate way in collaboration with the locals who benefit most from a project’s success. This year the CDF celebrates two milestones: its 70th birthday as well as a public, legal celebration of its long-term relationship with the Canadian Co-operative Association (CCA). The CDF and CCA association officially amalgamated this past July 1. Off paper, the two have supported a common mission for decades. Both focus entirely on developing local economies using cooperative principles — the same ones Canadian credit unions uphold. With CDF raising funds and CCA using this money to implement programs, it made good sense to amalgamate the charity and the association into one organization. (Canadian credit unions donate 44 percent of the money CDF raises annually, with the balance coming from other cooperatives, private donors and companies that work with co-ops.

Since 2010, CDF has leveraged $10 million raised from individual and cooperative donors into $100 million of project funding from institutional donors and international development agencies.

Staff at CDF readily admit to being single-minded when it comes to helping impoverished regions. Cooperatives and credit unions are one of the best routes to sustainable long-term growth. Communities with strong, locally driven economies are more resilient to crises of climate or government. And when residents are experienced and proficient at managing maintenance and growth, finding solutions to problems becomes less of a challenge.

Northern beginnings

The Canadian system has a reputation in developing countries for cooperative know-how earned through experience. “The co-ops on the Canadian prairies began in the same conditions of extreme poverty and exploitation,” says Michael Casey, the executive director of CDF. “Other countries are saying, ‘Ninety years ago you were in the same place – share this experience with us.’ ”

From its earliest beginnings, the CDF’s approach has been to share knowledge rather than deliver aid. The charity cut its development teeth in Canada’s North in the aftermath of a famine in the 1950s. The federal government sent military to gather starving Inuit families from scattered hunting camps into settlements, where it was easier to administer health care, education and housing. Traditionally nomadic communities were now dependent on food from the South as well as monetary aid to pay astronomically high grocery bills.

Share Canadian know-how but apply it in a culturally appropriate way in collaboration with the locals who benefit most from a project success.

Starting in 1962, the CDF focused its efforts here, eventually helping to establish the Canadian Arctic Producers Co-op, which gave northern people the means to market their own art. In 1973, the Canadian Arctic Co-operative Federation, which included member-owned fisheries, hotels and other businesses, was formed. Soon the remote communities were establishing cooperative grocery stores, competing against the Hudson Bay.

The CDF, meanwhile, was also fundraising for projects in the Caribbean, Uganda, Ghana, Columbia, Indonesia and Sri Lanka, among other countries. In 1979, it took over management of the international development projects of the Canadian credit union system. By 1984, the CDF was ramping up efforts to meet matching requirements of other donors. Since 2010, CDF has leveraged $10 million raised from individual and cooperative donors into $100 million of project funding from institutional donors and international development agencies.

Trouble in paradise

Typically, areas most interested in CDF’s assistance have been those economically disadvantaged by decades of colonial or authoritarian rule. For example, the Philippines was under former president Ferdinand Marcos’s martial law from 1972 to 1981, until a people’s revolution re-established democracy. In 1990, CDF dollars paid to send Michael Casey, who was program manager at the time, to the Pacific archipelago nation. Despite differences in geography, Casey says cooperatives in Canada’s North and the Philippines shared common obstacles: local control and governance and logistic challenges. “The people were just coming out of 15 years of dictatorship where they had been heavily dominated by rich elites, so they had great interest in democratic co-ops,” says Casey. “It was inspiring stuff to see people forming national groups and watch businesses grow.”

Youth Credit Union members from Accra Wesley Girls’ High School in Ghana, West Africa.

Indonesia, Casey’s next assignment four years later as country program director, faced similar issues after former president Haji Mohamed Suharto’s three-decade-long dictatorship ended in 1998. With CDF support the people were building a legislative framework from scratch to support democratic institutions. Six years later, Casey moved to Nepal, where farmers were just beginning to increase their yields enough to make use of cooperative marketing.

Globetrotting in Asia and Africa

While Casey coached fledgling cooperatives in Indonesia, Ingrid Fischer, CDF’s current business development manager, was falling in love with Africa on a six-month volunteer position. Her real job was managing North Peace Credit Union in Fort St. John, BC. But after several short projects in Africa, Fischer decided to take up full-time employment with CDF. Her first official posting was to Mongolia in 1999, another landscape of wild, vast beauty. “It was a bit of a frontier,” Fischer recalls. “They were finally without that Big-Brother shadow after the 1991 break up of the Soviet Union.”

Mongolia had more freedom but was also reeling from the collapse of social-safety nets. Citizens were interested in making businesses more secure and profitable and worker cooperatives sprang up among herdsmen, hairdressers, bakers and crafters of felted goods. Fischer’s role was helping to establish regulations that could support a viable cooperative system.

Six years later, CDF dispatched Fischer to Sri Lanka to lead the tsunami response team. She arrived one year after the 2004 catastrophe with a mandate to support villagers in rebuilding the local economy. Unlike other NGOs that focus on daily survival, CDF tends to arrive on the scene later and stay longer. “We don’t do relief work,” Fischer explains. “Our focus was on getting trades training going and restoring financial access through credit unions so that residents could get loans to pick up their old livelihoods or change direction.”

The CDF’s approach, as directed by Fischer, was to inject liquidity into the credit union system that would be transformed into equity for members. Thanks to their consistent lobbying, the CDF set up a $5-million revolving loan fund that members could access to launch businesses.

“The co-ops on the Canadian Prairies began in the same conditions of extreme poverty and exploitation.” – Michael Casey

When the position of regional director for Africa opened, nine years after she first joined the CDF, Fischer jumped at the opportunity. From her base in Uganda, she could also oversee other CDF cooperative efforts in Ghana and Sierra Leone. In Ghana, CDF volunteers from Canadian credit unions helped to create the first self-funded deposit guarantee fund. “More than funding, it was the expertise that Canadian credit unions gave,” Fischer says. “There are no Canadian dollars in the fund but funding from our federal government and credit unions paid for Canadian volunteers to go to Ghana, understand the situation and share their expertise.”

Unlike other relief efforts, where impacts are measurable immediately, knowledge transfer takes time to work through the system. Results, however, are arguably broader reaching. One achievement is the Women’s Mentorship Program, now in its 16th year. Women leaders from foreign credit unions come to Ottawa for a week of classroom training and then job-shadow managers at credit unions across Canada. With their peers, they calculate how to implement some of these learnings when they return home. “There’s a huge impact on the women themselves with increased confidence and self-esteem,” says Fischer. “In their home credit unions, almost immediately there’s a reduction in delinquency and they have substantial membership growth.”

It’s a satisfying result and one of which Canadian credit unions can be proud.

Fischer adds that an interesting result of work abroad is growing the brand for cooperatives within Canada. Until CDF arrives, many people in foreign countries have never heard of the co-op movement. But when people emigrate from areas where CDF or cooperatives are a source of economic assistance, they turn first to credit unions when setting up new lives in Canada. “When I look to the future and see where the new members are coming from, it’s immigration,” Fischer says.

CDF has much to celebrate on its 70th birthday and credit unions should share in the accolades, says Fischer. “I want credit unions in Canada to understand that people are improving their lives — not a token person but whole communities — as a result of strengthening credit unions and co-ops. People are moving forward and we’re part of that.” ◊