As countries in Africa and the Caribbean prepare for the first AfriCaribbean Trade and Investment Forum 2022 (ACTIF2022), attention is drawn to potential opportunities for flow between the two regions to help close knowledge and technology gaps that exist. Two areas where such gaps exist are the credit union movement and fintech development.
Worldwide, the credit union movement has made significant progress. According to the World Council of Credit Unions (WOCCU), of which credit unions in Africa and the Caribbean are members, globally there are 86,451 credit unions in 118 countries, serving 375 million people.
WOCCU estimates in its 2020 statistical report that the penetration rate for credit unions is 12.8%. Furthermore, the global body states that the 40,570 credit unions in Africa have a membership of 40,413,389 in 27 countries. Their assets amount to approximately $16.1 billion and the penetration rate was calculated at 14.34%.
Meanwhile, in the Caribbean, WOCCU indicates that 18 countries have 375 credit unions with a total membership of 3,763,325. It is worth noting that the assets amount to USD 10.5 billion. The credit union penetration rate in the Caribbean is 65.97%, the highest among seven regions identified by WOCCU.
The success of the Caribbean credit unions is to be applauded. The savings of the average Caribbean credit union member is nine times that of African credit union members. It is believed that these financial entities have best practices that they can share with their African counterparts to further develop the credit union movement on the African continent.
On the other hand, Africa has been a leader in the fintech industry. There is strength and sustainability in the continent’s fintech sector, which could benefit the Caribbean if collaboration is pursued. These alliances need not only be in the fintech industry. KPMG suggests there is room for credit unions and fintechs to be partners rather than competitors, adding that collaboration will give credit unions a strategic advantage in the area of innovation. According to the 2019 Global FinTech Adoption Index compiled by Ernst & Young, 64% of the global population uses fintech applications, four times the percentage reported four years earlier.
There are therefore opportunities for the Caribbean credit union model to be adapted for use in Africa and for African fintechs to help credit unions in both regions take the movement to the next level. Through fintech partnerships, credit unions can provide their members with cutting-edge technology and innovative payment solutions that will compete with the traditional banking sector.
ACTIF2022 kicks off in Bridgetown, Barbados from 1 to 3 September 2022. Visit www.actif2022.com for more information on this dynamic forum.
Originally published by Export Barbados
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