Posts Tagged International Credit Union Day

On the Road with NCBA: Strength in Numbers

Posted by on Thursday, 12 August, 2010

From Andrew McLeod, communications specialist for the National Cooperative Business Association (NCBA). Learn more about him and his trip to Mozambique here in his first CUNAverse post.

Yesterday I got a look at the grassroots of NCBA’s CLUSA International program. These are the associations formed by a few dozen individual farmers, and the second level “forums” through which associations band together to do work that is beyond the capacity of a single association.

The typical forum involves hundreds of farmers, putting them in a position to reach markets that would be well out of reach for an individual with a small plot and no vehicle. But these too are limited in a global market filled with transnational corporations.

This morning I picked up the story with a visit to IKURU. This is a trading company partly owned by 29 forums, representing more than 200 associations and 20,000 farmers. This is all not terribly different from the federated structure found in many U.S. agricultural co-ops.

Each association sends a delegate to its forum, which in turn chooses a delegate to send to the annual general assembly of IKURU. There, five farmers are elected to the board of directors, which meets quarterly and also includes two representatives from GAPI and Oxfam NOVIB, which together own most of IKURU. Although the farmers currently contribute only 14 percent of the company’s equity, they have control of the board.

About 80 percent of IKURU products are sold domestically. However, one of the services provided is certification for fair trade and organic, which brings a premium for the 20 percent that is exported through groups like the U.K.’s Twin Trading. IKURU also provides research and development, as well as supply of seeds and processing of outputs.

IKURU's cleaning operation

Because IKURU has aggregated the produce of many farmers, it has some leverage to seek help from organizations like Twin and Root Capital. The way the system works is that Twin makes a contract to buy a certain amount, which can be taken to Root Capital as a sort of collateral. Since IKURU’s founding in 2003, annual sales have grown to $1.4 million.

Still, IKURU’s biggest problem is cash flow. Farmers face two problems in the world of finance, which aren’t automatically solved by aggregation: Crops are seasonal, so there are times of no production and therefore no income. More challenging, the expense of farming comes long before the product is ready to be sold – and even longer before it actually is sold and payment is received.

One worrisome effect I heard from Forum Netia yesterday is that IKURU has not bought product that it was expected to buy, leaving Netia with more than 4,000 tons of grain and beans sitting in a warehouse. There are only about two months left before this harvest is too old to sell.

IKURU’s manager Moises says that they need at least $300,000 or more to get to the next level. Getting this formidable amount is complicated by Mozambican law, which prohibits international transfers of more than $5,000. So at least 60 separate loans would be needed.

CLUSA’s work has also addressed another obstacle facing farmers: the threat of aflatoxin contamination. This is a fungus commonly found on groundnuts or corn, which can cause serious liver damage. It is especially hazardous to people infected with hepatitis B or HIV, both of which are common in Mozambique. To identify and fix production problems that cause contamination, CLUSA was a partner in establishing a lab at Lurio University, known as UniLurio. Typically, testing has cost $150 and taken three weeks or longer, but this lab cuts the cost by 76 percent and reduces the wait time to a matter of hours.

Collecting samples to send to the lab

The lab is not certified, but it does provide preliminary results. This has greatly helped IKURU by identifying problems before the shipping process starts. And it has helped the people of northern Mozambique by reducing the prevalence of this hazardous toxin in their food supply.

UniLurio has attracted the attention of the World Food Program, which has provided $100,000 toward expanding the lab. That would facilitate WFP’s Purchase for Progress program and lay the groundwork for certification and expansion into other types of testing.

IKURU and UniLurio have a symbiotic relationship, in which the trading company provides the bulk of the lab’s business while the lab helps improve the quality of product. Together they have opened markets that individual farmers previously had no way of reaching.

PS: I just got word that Donn Teske – a Kansas Farmers Union volunteer for the NCBA/CLUSA Farmer to Farmer program – is blogging about his trip to advise cooperatives on the other side of Africa. He has way more interesting border-crossing stories than I do, and if you want a whole different glimpse into the wide world of CLUSA, check it out.


On the Road with NCBA: View from the Outskirts

Posted by on Wednesday, 11 August, 2010

From Andrew McLeod, communications specialist for the National Cooperative Business Association (NCBA). Learn more about him and his trip to Mozambique here in his first CUNAverse post.

After my previous post describing Mozambican cooperation at the national level, I am now going to zoom in to the very local.

CLUSA directly employs 120 people here, and indirectly supports the work of as many as 500 by training and funding staff of groups like Save the Children. CLUSA is reportedly one of the largest and most effective NGOs in Mozambique.

Today I was given an overview document that starts out like this:

CLUSA has been present in Mozambique since 1995…Today, CLUSA manages 9 agricultural programs in Mozambique, assisting 83,546 farmers to produce, process and sell groundnuts, sesame, cashew nut, soybeans, cotton, maize and beans…CLUSA Mozambique’s mission is the promotion of these communities’ intellectual, economic and social wealth through cooperative principles and a network of sustainable and viable rural cooperative businesses.

Good stuff, no?

Too big to be a garden, too complex to be a farm. New tomatoes mark the leading edge.

To find out how it looks at the ground level, we visited two groups of farmers.

The first was a brand-new association called Terra Natal. I’m not really sure what I was expecting, but it definitely wasn’t what I saw. We pulled off the highway, parked the car by a mud-brick house with corn and cassava drying on racks, then walked down a short trail that opened out into the most amazing vegetable garden I’ve seen in a long time, anywhere. And even after that, it took a while to grasp that it was basically a scaled-up version of a North American organic garden, using local herbs for pesticides.

The crops were cabbage, tomatoes, collards, onions and carrots; chosen for their nutrition value as a way of increasing food security. These crops are grown both for consumption and for sale. In all, I estimate it was about a half-acre, farmed by 14 men and six women –including their vice president, who couldn’t have been much older than 20 and was working with a conked-out baby on her hip. She beamed with confidence during the round of introductions.

The most amazing thing was that they had cleared this former scrubland in the last three months, and had raised a vibrant garden despite a drought that had reduced the nearby river to a series of excavated holes. Even more impressive, they had done this despite getting the seeds late and each member having the distraction of their own gardens.

One more sign of progress is that they are showing signs of adopting the unfamiliar new techniques as their own. They have a member who is in charge of teaching technique and making sure everyone pulls their weight. Another member leads the effort to teach nutrition and hygiene to their neighbors.

The second group was a second-level structure, called Forum Netia. It was made up of nine local associations (three of whose delegates were absent because the telecom problems prevented them from getting word of the change of date to accommodate our schedule).

The warehouse and headquarters of Forum Netia is now surrounded by the racks of a new major market.

The manager gave a presentation of the year’s totals, which were impressive. Each association ranges from 29-53 members, with a total of 396 members (108 of whom are women).  Collectively, they have grown 3559 tons of milho grain, 1533 tons of beans, 1288 tons of sesame, and 62 tons of peanuts. They are currently negotiating with the World Food Program to sell their remaining stock through the Purchase for Progress program.

They have not been a co-op so far, due to the term’s socialist baggage. But they are interested in the new law that establishes modern co-ops as autonomous organizations. This forum’s members want to engage in more commercial activity, so they are interested in converting to a model that allows for profit.

This is already a fairly remote area, far removed from the capitol in the nation’s southern tip. And from what I’m hearing the people don’t get to Nampula much, let alone to Maputo. Portuguese is a second language to them. They are also generally illiterate (at least until CLUSA gets its adult-educating hands on them). So any concepts of global economics are likely to be pretty hard to convey.

Still, they are the backbone of Mozambican society. So one of my main questions at the end of this day is whether and how a process of consciousness-raising might add social depth to the already profound physical changes that are happening.


On the Road with NCBA: View from the Center (of Mozambique)

Posted by on Tuesday, 10 August, 2010

From Andrew McLeod, communications specialist for the National Cooperative Business Association (NCBA). Learn more about him and his trip to Mozambique here in his first CUNAverse post.

Due to internet access issues, I’ve got a few days stored up. So this first post on the road will be a bit long.

One cool thing about my very long flight was that the South African Airways dairy buyer seems to like co-ops. We had Tillamook cheese, Land O’ Lakes butter, and yogurt from some relatively dinky outfit called the Upstate Niagara Cooperative. There was also a fair trade wine from a worker-controlled South African project called Fairhills. I love that sort of thing, when farmers can get their products on international flights. I’m curious to see what brands they have coming back.

Have you seen this rail car?

In the afternoon of my first day on the ground, I met up with my hosts Maria Jose (a consultant who works with the CLUSA program) and Momed Rafico (the president of the Mozambican Association for Promotion of Modern Cooperation, or AMPCM), and got a proper driving tour. One surprising highlight included a gorgeous century-old train station where we found a mysterious train car labeled “Cooperazione Italiane. Anyone who can convincingly explain how what appears to be a co-op train car wound up in Africa will win a prize.

While having a drink in the evening, I learned a few interesting historical tidbits:

My favorite was about is a neighborhood on the map that caught my eye, labeled simply “Coop.” I asked whether there is a story, and got more than I bargained for: It turns out that during the late colonial period, a group of Portuguese organized a huge co-op, with 6,000 houses, a bank, grocery store and other amenities. Alas, when independence came most of them bailed out and the place was nationalized, effectively becoming a public housing project. Now, it turns out the government is tired of running the joint and wants to give it back to the residents. Trouble is, the 20% of current residents who were formerly co-op members now have a claim on the place, especially since the nationalization law was apparently not properly ratified and therefore the old titles are still valid. Yikes.

We started my second day with a few tours. First we stopped by a credit association called Associacao Phambeni Makwero. All of the employees were in their early 20s, including the director, Atimo, who showed us around their sparse but spotless offices in an building owned by the Catholic group Caritas.

They aren’t a co-op, with a fundamental difference that they refer to their 2000 “beneficiaries” and are governed by an appointed board that is mainly priests (although these select a couple of beneficiaries to join them). They offer mainly commercial and home improvement loans, with a rate of 4.5% (less than half the country’s fierce inflation rate, and a quarter what banks usually charge). They also offer savings accounts, insurance to cover funeral costs, and a new loan program for appliances. Their portfolio is about $200,000, with loans ranging from $100 to $1000 on a repayment schedules range from 6-12 months. Commercial loans are offered only to women. They have three branches in the suburbs, where poverty is the worst and their services are most needed. Despite taking only 4-7 days to approve loans, they have had only 10 of 800 loans default this year.

Our next stop was CoopMed, a cooperative of 80 doctors, including Rafico. They are based on a Brazilian model, providing mainly fee-for-service medical care including minor surgical procedures. They are open 24 hours a day with a general practitioner always present. Their services include pediatrics and gynecology, and they hope to re-start the dental practice by the end of the year. They have eight beds, as well as their own lab for basic test work. Their main difficulty is that specialists can make more money at private clinics, so they are sometimes less available to do their clinic work.

Your intrepid blogger shops at co-ops everywhere he goes.

Stop number three was the Polana neighborhood consumer co-op, a tidy little store with amazing prices, like 30c for toothpaste and wine for about a quarter what I paid last night. This connects to another interesting story I first heard last night: After independence, most of the Portuguese shopkeepers left. So the government set up more than a 2000 “co-op” grocery stores, including about 80 in Maputo. After the end of the People’s Republic, competition made these unprofitable and now all but three have ceased to operate.  Most simply dissolved, but I hear than nine survived by becoming a sort of cooperative real estate holding company; they rent out their spaces and split the proceeds among their members.

Then we had a meeting with the AMPCM. We met crammed into a room shared with the national farmers’ union (an AMPCM member), but it was an amazing meeting. The first hour was spent introducing me to all their members, including several agricultural groups, a co-op of tradespeople, a recycling co-op that has given former scavengers a better life cleaning and processing, and the consumer co-op association. The second hour was a business meeting, and that’s where it got really interesting. They are just starting out with only 15 members but big plans are in motion.

As an after-effect of their startlingly successful work reforming the law (with key help from NCBA’s CLUSA International program, which also played an essential role in the creation of AMPCM), they recently met with the prime minister to hash out some details of the regulations. He has asked them to come back for a meeting of the full cabinet to explain the benefit co-ops more fully. Try picturing that in the U.S.!

The other amazing thing is that there is a big national trade show coming up in a few weeks, and they are getting a professionally-developed 100 square-foot booth, featuring a video monitor, as well as several square meters of display space for each member. And while they were at it, Maria showed the designers a brochure she got from CLUSA’s work in Indonesia, holding it up as a model for how she would like the handouts.

And if that isn’t enough, they have a detailed and very ambitious four-year strategic plan under development, which includes a detailed $1.3 million budget to focus on housing, health, consumer and agricultural co-ops. They plan to devote 70 percent of the budget to activities, including study trips to visit Kenya and Tanzania.

What has me most excited is that this group seems to be gaining its own momentum. It probably wouldn’t have gotten to this point without years of ongoing support from CLUSA. But now they seem to be starting to strike out on their own. Due to the general poverty of the country, they are still in need of grants from groups in wealthier nations. However, they seem to be identifying and approaching these grantors under their own initiative. That suggests to me that the overall CLUSA approach is working, and we should be keeping an eye on how we might continue to back AMPCM and looking for other nations in which this sort of potential is brewing.

After the meeting, Rafico and Maria took me out to one more lunch before the airport. We had a great talk about whether the “buy local” impulse can be nurtured in a society where so many are living day-to-day and totally focused on immediate survival. We had a lively debate with no clear resolution. But one thing that seems likely to me is that local production in Mozambique has a long way to go before it can compete with imports from South Africa and elsewhere. If they are to compete, I think they need to do that in a two-pronged approach, in which consumer co-ops in the Global North provide the initial volume to develop infrastructure and economies of scale. This is obviously just the germ of an idea, but I’m going to be chewing on this thought for the rest of the week.

I’m now in Nampula, which is a much smaller and dustier version of Maputo. My hotel is on the top two floors of the tallest and most fancy building in town, which also houses a small mall and offices. CLUSA’s office is almost directly below me. Despite the upbeat news article claiming that telecommunications are “back to normal” there is no internet in the hotel.

In the morning, we’re getting up early and driving for an hour to visit two farmer associations – one brand new, and one starting to become more of a co-op. I look forward to seeing this from the grassroots. After a short and incomplete glimpse of things from the capital, I’ll be able to see the most basic part of the work here. From there, I hope to start filling in the gaps, gaining a better idea of what’s happening.


On the Road with NCBA: Meet Andrew

Posted by on Thursday, 5 August, 2010

Andrew McLeod

Hi. I’m Andrew. I’m the communications specialist for the National Cooperative Business Association (NCBA), and I’ll be guest blogging here at CUNAverse for a little while.

Next week, I’m going to report on co-ops in Mozambique.

This all might seem a little off-topic for a credit union blog, but there is a growing movement to increase the connection between credit unions and the rest of the cooperative movement. CUNA and NCBA have been working closely together for many years and NCBA welcomes this and all opportunities to foster closer ties among all cooperatives. Credit unions have a huge role to play in the struggle to create an economy based on peoples’ needs.

During this trip, I will look at all aspects of NCBA’s work in Mozambique, which is carried out through our CLUSA International program (whose name refers to NCBA’s original name, the Cooperative League of the U.S.A.) In the past 53 years CLUSA International has helped develop co-ops in over 50 countries from East Timor to El Salvador, with a large concentration in Africa. 

Mozambique is currently our largest portfolio, with nine projects. After gaining independence from Portugal in 1975, this nation in southeastern Africa suffered an intense 15-year civil war and is still one of the world’s poorest countries. It is quite large, covering an area that would stretch from Georgia to New Hampshire to Ohio, with a population of roughly 23 million people.

Our projects range from helping to launch farmer associations and training farmers to increase production, to creating export opportunities through fair trade and food quality testing. We have also improved the overall framework for co-ops by mentoring a national co-op association and facilitating a new legal framework for cooperatives.

I’ll know a lot more next week, but I want to briefly give some background regarding this last point.

In The International Cooperative Movement, (pp. 134-5) Johnston Birchall observed that colonial governments sometimes used as an instrument to modernize and “civilize” the native people, and that:

The colonial legacy affected co-operative movements in Africa long after the colonial administrators had gone. In some countries…co-operatives were used as an organising base by nationalist movements which then became governments, and so it was natural that they should also see co-ops as an instrument for economic development…but instead of the ideology of progress towards market societies they saw co-ops as being a way of creating a distinctively socialist alternative.

Birchall did not address Mozambique, but from what I’m hearing this dynamic was definitely in play.

“Co-ops” have a lot of baggage, so legal reform was an essential step toward establishing that co-ops are not just an instrument for do-gooders to help out a helpless people. That is not the point here, and I believe that NCBA’s work helping launch the Mozambican Association for the Promotion of Modern Cooperatives is a great companion to the legal reform. Yes, we in the Global North have a lot of resources to share, but we also have to be careful about how we do it and always remember that we are helping.

In any case, there’s no need to worry: I’ll keep an eye out for financial cooperatives of all sorts, and let you know what I find.

This blogging will also be the foundation for an article in the next issue of the Cooperative Business Journal, which should hit the streets in mid-September. I look forward to reading your comments, which will help shape my work on that later writing.


>Happy International Credit Union Day!

Posted by on Thursday, 18 October, 2007

>How many industries have their own holiday? You have to admit (well, I am anyway) that it’s kind of neat. Here at CUNA, I just attended a special lunch for employees complete with pizza…and cake! There is also presentations on the history of the credit union movement. To me, every day is credit union day, but again, I’m a credit union dork like Josh.

Is there an international bank day? No, because we are truly unique.

As Dan Mica said in a note today, “These not-for-profit, democratically controlled, member-owned cooperatives not only offer great service, better rates, and lower fees, they also provide access to financial services and improved economic and social opportunities for members worldwide.” I don’t want to sound like I’m drinking the kool-aid, but I think it’s okay to toot your own horn at least one day a year.

Credit Union Day coverage is here.

Next step: How do we get credit union members to celebrate credit union day? Non-members? Young Adults?

Update: Morriss at EverythingCU articulates a much more detailed related message here