Cooperative Development
Organizations Building a More Prosperous World

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Success Stories

AAC/MIS

Providing Assistance to Strengthen Popular-based Insurance Companies in Latin America

The Americas Association of Cooperative/Mutual Insurance Societies (AAC/MIS) is an association of over 35 popularly-based insurance societies from North, Central and South America and the Caribbean. AAC/MIS members share ideas and experiences to better equip themselves to provide modern and competitive insurance protection. AAC/MIS offers technical assistance and educational opportunities to new and emerging member societies based on the principles of mutual self-help, democracy in ownership and governance, and equitable sharing of gains and losses. The association responds to requests from cooperatives, credit unions and associations throughout the hemisphere that ask for assistance in forming their own insurance agency, department or company.

The focus of AAC/MIS' international development efforts is to work with their members to reach and serve populations who currently have no access to insurance. It has been often said that the people who are most in need of insurance are those least able to afford it. As popular-based insurance companies are formed by credit unions, cooperatives, labor unions and farmers groups, AAC/MIS members in developing countries are a sustainable and highly effective way to develop appropriate products to reduce the personal and business risks of lower-income people. For further information, see www.aacmis.org.

ACDI/VOCA

Cooperative Development Program

In 1997, ACDI/VOCA launched an $890,089 Cooperative Development Program (CDP) to strengthen Mozambique’s agricultural systems through person-to-person volunteer technical assistance at the grassroots level. Concluded in 2004, the USAID-funded CDP supported association development, agribusiness planning, production and marketing of high-value niche products, and rural microfinance. By the project’s end, ACDI/VOCA had sent 36 American, British and Brazilian volunteers to work with local associations, agribusinesses and support institutions. During the first phase of the project alone (1997-2002), there were 1110 male and 1031 female direct beneficiaries and well over 16,000 male and 15,000 female indirect beneficiaries. The subsequent two-year phase centered on the development of materials and tools to be used with innumerable smallholder farmer beneficiaries throughout central and northern Mozambique.

CDP worked in the five center-north provinces of Sofala, Manica, Nampula, Tete and Zambezia, concentrating most of its efforts along and around the Beira Corridor. Much of this assistance was targeted at women who, despite their dominant role in agriculture, generally have little control over household resources or decision making due to social traditions and limited education opportunities. Female technical assistance providers were used as a way to reach out to Mozambican female farmers. Mozambican respondents to a survey conducted at the end of the project showed that the household incomes of 94 percent of assisted males and 98 percent of assisted females had improved in 2004.

In 2004, a successful off-season vegetable production program showed a gross return on credit disbursed to be 711 percent, and each participating member’s sales averaged $589 for four to five months of work.

Through a series of volunteer assignments, ACDI/VOCA helped local bee-keeping associations to make the transition from traditional, environmentally destructive tree bark hives to Kenyan top bar hives. This change has enabled the beekeepers to manage their hives, resulting in better quality and increased production. The improved honey quality led to higher prices and a 425 percent growth in yields. Collective marketing allowed beekeepers to reduce transportation costs and raise the average profit per liter of honey sold by 250 percent.

CDP produced a wide range of business training manuals, developed by volunteers and staff for entrepreneurs with basic levels of formal education, in addition to illustrated leaflets and brochures in Portuguese and local languages focusing on specific areas of technical assistance designed for semi-literate entrepreneurs. These publications were distributed freely to other development organizations including USAID partners, educational institutions and government departments for use throughout the country.

ACDI/VOCA also worked with the Provincial Farmers’ Unions in Sofala and Manica Provinces, assisting and advising elected officers as they sought to improve management practices and establish sound operating systems. Manuals outlining the responsibilities for each position were produced and distributed to provincial and district level unions and associations throughout the center-north of Mozambique.

ACDI/VOCA sourced domestic and export markets for a number of agricultural products. Birdseye chilies, traditionally cultivated for domestic use and as land boundaries, were recognized as a profitable cash crop through the collaborative efforts of ACDI/VOCA and the Geneva-based NGO, Food for the Hungry International. Similarly, ACDI/VOCA worked with a local NGO, Kwaedza Simukai Manica, to train ginger producers along the Mozambique-Zimbabwe border to construct dryers and establish links with European buyers.

CDP staff members provided training and technical assistance to support the development of a business community in the center-north of the country. Through partnerships with agricultural colleges, the Mozambique and Zimbabwe Chambers of Commerce, local NGOs, producer associations and businesses within the region, ACDI/VOCA played a central role in bringing together the various stakeholders. ACDI/VOCA organized and co-hosted several regional trade exhibitions that promoted business links, provided valuable market information to producers and traders, and directly led to a number of contracts among participating enterprises.

Currently, ACDI/VOCA is implementing Cooperative Development Programs in Russia, Brazil and Paraguay.

CHF International

Economic Innovations & Livelihood

While most have forgotten the devastation of war in the Balkans, ten years later the people of Bosnia and Herzegovina still struggle with their housing and economic circumstances. Many people today live in war-damaged multi-storied apartments that need major structural repairs and renovations; most buildings have no central heating, which means that families heat their units by burning wood and venting smoke through make-shift vents in their walls.

In the town of Maglaj, however, residents have come together to collectively improve their living conditions. Known as the Maglaj Homeowners Association, this group raises awareness among residents about the importance of maintaining common property, and it provides services to members such as legal advice, registration guidance, and assistance in obtaining group loans for the management and maintenance of common space.

Last year, this group devised a creative strategy to generate revenues while also effectively contributing to sustainable waste management in the area (an especially important topic in the EU context). Recognizing that many residents and businesses in the area use and waste paper every day, the Association decided to collect the waste and transport and sell these resources to a nearby paper production facility for a fee. With support from USAID and CHF International, this group purchased recycling boxes, organized resident and student education efforts, and actively launched a media campaign throughout the town. So far, an astounding number of 78 resident buildings and 42 businesses and municipal offices have joined the campaign, which collects paper waste each week. Together, participants have generated over $1,300 in revenue for the Association—a considerable success for an organization that had formed only months before. In turn, the Association has been able to maintain its services to over 1,100 residents.

Recently, the Association has begun to promote the development of a property management agency in Maglaj. CHF International has helped them learn how to form a transparent and representative housing apex organization, and how to develop a revenue model by which they can provide quality services to residents over the long run. This year the Association plans to offer accounting services to housing cooperatives. They also plan to establish a rotating savings and credit association (ROSCA) that would provide small loans to home-owners in multi-storied units for repairs and improvements to their apartments. The Association is working on improving the performance of management agents, and is also helping them develop accurate resident records. Through the USAID-funded IMPPACTS program, CHF International continues to work with Maglaj Homeowners Association to expand its services and revenue base so that it may continue to improve the lives of residents over the long run.

Land O'Lakes

Land O’Lakes Accelerating Rural Economic Growth in the West BankLand O’Lakes Accelerating Rural Economic Growth in the West Bank

This project assists low-income dairy producers to increase their incomes and expand the capacity of small and medium enterprises to provide higher-quality dairy products to the Palestinian population. The project also will help achieve performance results across the spectrum of economic growth objectives, including increased economic opportunities and improved access to technical and financial systems, among others. The project will address health objectives for mothers and children by educating them about the health risks posed by unpasteurized milk and by providing basic nutrition education.

The West Bank is home to the Bedouin - - traditional dairy and meat producers who provide dairy products for the rest of the country. Dairy is vital to the lives of more than half of the Palestinian population, directly as a source of income and indirectly as reasonably-priced food products. Families depend daily on milk, milk products, and meat from their herds to meet nutritional needs. Dairy products are the major protein source for Bedouin families and especially for pregnant women and young children. Also, surplus production beyond family needs is sold in local markets, providing the major source of Bedouin cash income.

One of the most immediate development challenges is the inadequate quality of milk. Higher-quality raw milk is critical both to developing a competitive industry and eliminating serious health problems facing rural Palestinian families, especially children. Improvement of quality at both the farm level and in processing facilities will enable the dairy sector to overcome fundamental constraints that now limit marketability of their products: a reliable source of clean, raw product; short shelf life of product; and consumer preference for finished, quality product.

The project will address the entire supply chain, including input suppliers, producers, processors and consumers. For a dairy industry to be competitive, producers must have an incentive to deliver higher-quality product and to create linkages with processors through efficient collection systems. Producers participating in associations and cooperatives can gain market leverage and negotiate arrangements with processors to assure appropriate financial incentives for higher-quality milk. Processors then require improved management, technological innovation, and greater product variety to better meet market demand. Moreover, consumers must be educated about the nutritional value of dairy products and proper food handling and safety measures.

Land O'Lakes current project builds on the strong producer base created under a previous project and will bring innovative activities to producers, processors and consumers to improve milk quality, ensure food safety, and augment child nutrition by providing affordable, clean dairy products throughout the West Bank. The extension also will expand to include Palestinian dairy cow farmers in Nablus, Hebron and Tulkarem, and facilitate business relationships to small processing plants in the area.

NCBA

NCBA/CLUSA Helps Build New Democratic Republic of East Timor

NCBA has worked in East Timor since 1994 to help farmers and their cooperatives develop new markets for their products and to provide vital services to their members. NCBA's CLUSA International Program assists in:

coffee and vanilla procurement, processing and export marketing;
health care services;
food and consumer goods purchasing and distribution;
cooperative development; and
human resources development and training.

Results:

20,000 Families Assisted
Despite the major disruptions caused by the political changes of 1999 and 2000 wherein the country established its independence, the project has continued to assist approximately 20,000 farm families in the processing and exporting of their coffee, including the development of high value organic and specialty coffees.

Co-ops, Jobs Created
Teams of project personnel have organized the participating farm families into 500 democratic farmer cooperative enterprises, that are, in turn, members of 16 primary cooperatives. In addition, NCBA helped establish a new national level coffee federation—Cooperativa Café Timor. Together, NCBA-assisted coffee cooperatives make up the single largest private sector employer in East Timor, employing 300 full time staff and up to 3,900 seasonal workers.

Incomes Increased
Project-affiliated cooperatives pay farm gate prices that are significantly higher than those available from other market channels. Farmer receipts for coffee cherry sold at the project's wet processing facilities average 50 to 80 percent higher than prices received for dry parchment coffee on the local market. NCBA assistance has significantly raised incomes to these families.

Coffee Exports Become Major Industry
13,000 metric tons of specialty coffees were marketed by project-assisted businesses during the 2002 marketing season. Coffee exports have become, by far, the most important economic activity in the country and the largest source of earned foreign exchange income in the country.

Producers participating in the project have dramatically improved Timor coffee quality. Coffee produced by the project-assisted cooperatives now ranks in the top one percent of world coffees in "cup" quality. Following NCBA efforts seeking international organic certification for coffee grown by participating farmers, the East Timor network of coffee production, processing and export cooperatives has become the world's largest producer of organic coffees.

The project has also helped farmers to produce, process and market vanilla internationally. The project operates a revolving fund, which lends to cooperative enterprises.

Health Clinics Serve Thousands
Under the Health Maintenance/Health Care Component, NCBA is operating eight fixed health care clinics and 24 mobile clinics in five administrative districts in the country. As of March 2002, the clinics served approximately 90,000 people. The clinics participate in national programs for nutrition.

To read more about the coffee project, click here.

NRECA International Limited

Electrification in Bangladesh

After independence, Bangladesh took the decision to electrify its rural areas to promote socio-economic development and to help fulfill the constitutional right of citizens to have access to electricity. In the early phases, USAID was the single donor providing commodity support and technical assistance through NRECA. The technical assistance has covered every aspect of rural electrification, including: developing design and construction standards; establishing program policies and procedures; promoting member education and productive uses of electricity; developing training programs for REB management, PBS Boards, managers, and technicians; and providing assistance to rapidly increase service territory through very aggressive system construction projects. Strong emphasis was placed on institutional capacity building to promote sustainability.

Because the Bangladesh Program is closely patterned after the U.S. RE cooperative model, this partnership has permitted the use of numerous NRECA advisors with decades of experience in rural electrification program design, management, and implementation to Bangladesh as a means of developing a culture of success and a well-founded work ethic that was taken from the U.S. RE Program. The success of this effort has been due in great part to the close and mutually supportive relationship between REB/PBS personnel and the working staff of its partners, NRECA and USAID. NRECA helped develop the first 13 cooperatives. Presently, 67 cooperatives (PBSs) cover virtually the entire country. The cooperatives, called Palli Bidyut Samities (PBSs) or rural electric societies, were established to deliver electric service to their member consumers.

Impacts of Access to Electricity *
· Enhanced productivity and output
· Increased employment opportunities
· Enhanced food production with irrigation
· Increased household incomes
· Expanded rural investment and industrialization
· Improved living standards and quality of life
· Increased literacy rate
· Enhanced awareness of women & children rights
· Improved information access through media

* These Impacts were originally identified by the "Socio-economic Impact Evaluation of The Rural Electrification Program in Bangladesh", Unnayan Shamannay, February 1996. These were reconfirmed and statistically validated by the "Economic and Social Impact Evaluation Study of the Rural Electrification Program in Bangladesh", Human Development Research Centre (HDRC), October 2002.

WOCCU

CUs Fostering Economic Recovery in Uganda

Nalongo stands next to the family's small retail store.

Overcoming its history of uncertainty, Uganda, in the past few years, has begun to emerge as a potential success story. Previously characterized by the infamous 1970s dictatorship of Idi Amin, followed by frequent civil wars and a devastating devaluation of currency in the 1980s-all of which resulted in 50% of the population living below the poverty line in the ‘90s, this eastern African nation has had its share of trials.

Although the facts seem grim, Uganda is moving toward a hopeful future following recent political, economic and social reform. In the last decade, Uganda has established a favorable policy environment which is resulting in strong growth. Ugandans themselves have a strong spirit of entrepreneurship, necessary for survival and the betterment of their lives and communities. And credit unions are playing an important role in fostering economic recovery by reaching out to and enabling Ugandans to grow through access to affordable financial services.

Helping Members Move Out of Poverty

Surviving the various economic and political crises, Ugandan credit unions began rebuilding in the 1980s. Until recently though, they lacked access to technical support or exposure to advancements in providing microfinance services for members. That has started to change since September 2000, following the start-up of a WOCCU project, referred to as the Ugandan Rural Savings and Credit Cooperative Societies Financial Network, or SACCO-Net. Funded by the U.S. Agency for Inter- national Development, the WOCCU SACCO-Net project works with 14 savings and credit co-operatives (SACCOs), to install effective financial disciplines that focus on aggressive membership outreach and providing high quality savings and credit products for members.

With a gross national product per capita of US$320, most Ugandan households are poor and reside in rural areas. SACCO members combine a variety of economic activities to survive. The average savings balance of SACCO members is US$51; loans range from US$30 to US$500 and are used to diversify members’ business activities and investment in their children’s education, improving their capacity to move out of poverty.

SACCOs also play an important role in the economic and social lives of teachers, of which there are 90,000 in Uganda, most of whom are rural women earning less than US$80 per month. SACCOs lend to teachers for investment in their microenterprise activities, which supplement their teaching income. In other countries, teachers’ SACCOs have successfully expanded membership to their communities. SACCOs serving members with wages contribute to a more stable source of savings to finance micro loans.

Leaving A Legacy

Mrs. Justine Mwasa lives in the village of Kagungo in north Katikamu, Uganda. For the last 30 years she has been a resident in this small village, which lacks basic services such as tap water and electricity. Here, she has proudly raised 11 children, six boys and five girls, now all young adults between the ages of 19 and 29. Four of her children are twins, earning Mwasa the name, “Nalongo” meaning the bearer of twins. She is very proud, because six of her children have become teachers, following in their mother’s footsteps.

Nalongo Mwasa has been a teacher for 30 years, earning her great respect from the people in this simple village. As a teacher, however, she earns little to support a large family. Although her annual salary increased this past June to US$1,760, she has started a number of small businesses, which generate additional annual income of US$1,260 to balance the home budget and feed, cloth and educate her children.

For all of these businesses and for expenses like her children’s school fees, Nalongo Mwasa has turned to her credit union for start-up capital and expansion. A member of Luweero Teachers SACCO for 12 years, she is one of the founders. Since 1997, the SACCO has granted her a total of US$1,580 in three small business loans, which were disbursed in nine installments due to limited finances in the SACCO. In 1997, she borrowed US$720, in 1998 US$60, in 1999 US$740 and another US$60 in 2001. She has been using her teacher’s salary to pay off the loans, while reinvesting the business proceeds.

All of the businesses are managed with assistance from family members and conveniently located on the family’s plots of land, called bibanja. By Nalongo Mwasa’s estimates the family’s bibanjas are approximately 10 square acres. The family house, a neat permanent building is also located on one of the plots.

Among her diverse businesses, Nalongo Mwasa productively uses her bibanjas for growing bananas, ginger and passion fruit. Mwasa has invested US$140, but has yet to realize a yield. The family’s most profitable business is passion fruit, also covering approximately one-fourth of an acre. So far they have harvested once and realized gross earnings of US$150 on an investment of US$80. The passion fruits are sold on the open markets in Luweero Town.

The family also raises cattle and has a small retail shop. Mwasa currently has 10 animals; one animal has a calf and is providing three liters of milk per day to the family, an extra bonus. In the small retail store managed by one of her daughters, they sell basic household goods to the community.

“I have currently applied for retirement from teaching in government schools. I want to leave an education legacy,” noted Mwasa. To that end, she is preparing to open up a nursery school. Without a suitable building available, she must construct one. Estimates indicate that she will need about 10,000 bricks, which will be made from her own plot of land. Mwasa’s son is overseeing the brick- making project. She will need a loan from the SACCO at some point, but has not decided on the size. Nalongo Mwasa plans to hire two teachers to help run the school and she will charge US$5 per child, per term for each of the three terms in one calendar year. In her business plan, Mwasa needs an attendance of 120 to 150 children. Once she reaches full attendance, coupled with regular banana harvests, Mwasa will double her annual income.

No doubt the Luweero Teachers SACCO has a role to play in the economic and social life of Nalongo Mwasa, her family and all teachers in the district. The WOCCU SACCO-Net Project is working with the SACCO to introduce and implement the WOCCU Model Credit Union methodologies. The project will, among other things, technically assist the SACCO to improve on its safety and soundness as a specialized financial services provider. This will improve the image of the SACCO and facilitate membership growth, increased savings and the introduction of new and more innovative products. The SACCO will then be on the road to offering more financial services of improved quality to enterprising members such as Nalongo Mwasa.

Being a SACCO member has changed Nalongo Mwasa’s life in many ways. The SACCO has provided her with a place she can conveniently save without walking long distances. She has learned how to use her money wisely and as she saves, it gives her time to plan for the future. Because of her SACCO’s education and training programs, Mwasa and other members have become keen record keepers, understand the wise use of credit and have steadily mobilized their small savings to make a better life for themselves and their families... ultimately fostering the economic recovery of their nation.

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