As countries in Africa and the Caribbean prepare for the inaugural AfriCaribbean Trade and Investment Forum 2022 (ACTIF2022), attention is being paid to potential opportunities for flows between the two regions to help plug knowledge and technology gaps that exist. Two areas in which such gaps exist are the credit union movement and fintech development.
Worldwide, the credit union movement has been making significant strides. 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, which serve 375 million people.
The WOCCU in its 2020 Statistical Report estimates that the penetration rate of credit unions is 12.8%. Further, the global body states that the 40,570 credit unions in Africa have a membership of 40,413,389 across 27 countries. Their assets total approximately US$16.1 billion and the penetration rate was calculated at 14.34%.
Meanwhile, in the Caribbean, the WOCCU indicates that 18 countries have 375 credit unions with membership totaling 3,763,325. Of note is that the assets total US$10.5 billion. The penetration rate of credit unions in the Caribbean is 65.97%, the highest among seven regions identified by the 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 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 collaborations are pursued. These alliances need not only be in the fintech industry. KPMG suggests that there is scope for credit unions and fintechs to be partners rather than competitors, adding that working together would give credit unions a strategic advantage in the innovation space. According to the 2019 Global FinTech Adoption Index compiled by Ernst & Young, 64% of the global population use 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 would rival the traditional banking sector.
ACTIF2022 comes off in Bridgetown, Barbados from September 1-3, 2022. Visit www.actif2022.com for more information on this dynamic forum.
Originally published by Export Barbados
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