Workshop on Small-Scale Farming in the Caribbean: "Innovative Financing for Small Scale Farming: The Role of Credit Unions", by Ingrid O’Marde, Former General Manager of Community First Cooperative Credit Union Ltd. –

1. Innovative Financing of Small Scale
Farming: The Role of Credit Unions
• Celebration of today, October 18th, as ICU
day, when over 186 million credit union
members get the opportunity to remind the
public of their ability to improve the lives of
individual families, communities and countries
around the world by providing affordable and
secure financial products and services. The
theme – “Members matter most”.

2. What is a Credit Union?
• A credit union is a co-operative financial
institution that is registered under the
Cooperative Societies Act in force, is owned
and controlled by its members, and
operated for the purpose of promoting
thrift, providing credit at reasonable
rates, and providing other financial services
to its members.

3. What is a Credit Union (2)
• Many credit unions exist to further community
development or sustain international
development.
• Credit union systems vary significantly in terms of
total system assets and average institutional asset
size - ranging from volunteer operations with a
handful of members to institutions with several
billion dollars in assets and hundreds of
thousands of members.

4. What is a C.U (3)
• Credit unions are typically smaller than banks.
• As a financial co-operative, the credit union is
a legal entity owned and democratically
controlled by its members adhering to the co-
operative philosophies and principles.
• The World Council of Credit Unions (WOCCU)
defines credit unions as “not-for-profit” co-
operative institutions.”

5. What is a Credit Union (4)
• Credit Unions are safe, convenient places to
access affordable financial services.
• Credit Unions offer a full range of financial
services, giving members greater flexibility to
meet their individual needs.
• Members receive dividends from surplus
gained by the credit union.

6. Problems Facing Small Farmers
• Praedial Larceny Pests/diseases
• Damage to Livestock Limited land tenure
• Natural Disasters Drought/Climate Change
Farm Maintenance Under capitalization
Gluts in production Limited use of
technology
Limited access to affordable financing/credit
support

7. Problems facing small farmers (2)
• Limited Business management Knowledge
• Absence of significant Co-operative Activity
• Ongoing effects of global recession and
changing weather patterns.
• Both vegetable farming and raising of livestock
subject to the whims of nature and
competition of businesses which import food
• Small farm size

8. Credit Unions and their commitment
to the ordinary person
• Prepared to lend to every member as long as
savings are adequate
• No problem lending small sums of money for
provident or productive purposes
• Gives members greater flexibility to meet their
individual needs
• Economic benefits distributed proportionally
according to each member’s level of economic
interest in the institution.(Permanent Shares)

9. Commitment (2)
• Despite commitment to lending to all small
entrepreneurs, the uncertainty surrounding land
tenure has from time to time prevented the
credit union from lending to small farmers.
• CFCCU has engaged with Min of Agriculture to
ensure collaboration in the area of credit to small
farmers, develop mechanisms and methodologies
for establishing standards, liaising with
extension officers etc

10. Examples of recent CU financing in
OECS
• Case of Grenville Credit Union – Financing to
vendors who are ensuring that food is
transported from the rural areas to the
markets both local and overseas, making the
crucial link between farmer and small business
persons.
• Merger of rural and urban credit unions in
Dominica, giving greater access to persons in
the agricultural sector and giving loans in
specialized areas

11. Financing Examples (2)
• In St.Kitts/Nevis the FND, in 2009 converted
into a credit union, turning its customers who
had received small business loans into
members and continues to provide funding for
agribusiness.
• Despite the harsh economic times - dividends
of 3% were paid out to members for 2011.

12. Financing Examples (3)
• St. Vincent and the Grenadines provides with the best
example of credit union collaboration in its efforts to
provide funding for productive lending, to include
agriculture, housing and other small and micro businesses.
• Following the launch of the Govt’s policy for Small and
Micro Business Development, the League, on behalf of its
affiliates commissioned a study to explore the possibility of
establishing a financial consortium for encouraging the
development of SMMEs.
• The result today is a co-operative (COMFI) owned by 9
credit unions, committed to providing access to a variety of
services, including insurance, loans and financial education
for farmers, agro-processors, vendors and generally
members involved in micro and small business enterprises

13. Financing Examples (4)
• We were advised that COMFI is moving ahead
with operational logistics and has recently
appointed a Manager, answerable to the Board of
Directors, represented by credit union senior staff
and officials.
• COMFI represents the best example of the
pooling of resources by an institution better
equipped than most other financial institutions to
respond to the needs of it members

14. Opportunities for future Collaboration
• What is needed?
 A definite paradigm shift in the attitude and
approach by the Govts through their Ministries of
Agriculture – particularly in this climate of
economic recession.
 Establishment of specific policies which would
address a number of issues, to include land tenure
for small farmers.
 Creation of avenues for development of
scientific, technical and technological systems in
agro- processing, marketing and networking

15. Conclusion
• Co-operative entities like credit unions must
collaborate to access some of the finances by
external agencies for specific activities aimed at
improving the life of the people who live in
farming communities.
• Like the members of COMFI, they must also pool
their own resources to conduct
research, feasibility studies and use the results to
introduce products and services that
demonstrate to members that it is they who
“matter most”.