TRIPOLI, Libya (12/26/12)--
| San Francisco FCU President/CEO Steven Stapp (far left), The MILLA Project's Lara Thomas (center) and World Council of Credit Unions President/CEO Brian Branch (far right) met with a business group in Misrata, Libya, to discuss Shariah-compliant financial products that credit unions may offer there.|
World Council of Credit Unions (WOCCU) representatives traveled to Libya earlier this month to discuss credit union development with central bank authorities, civil society groups and local business councils.
Libya's transitional government is beginning the road to economic recovery as it rebuilds from a civil war and international attention following the Benghazi attacks, said WOCCU.
WOCCU President/CEO Brian Branch traveled to Libya with Steven Stapp, president/CEO of San Francisco FCU. Also with the group were Lara Thomas and Allaeddin Ghadyi from The MILLA Project, an international human rights organization working to bring democratic financial institutions to Libya. Thomas is a member and 2012 scholarship winner of WOCCU's Global Women's Leadership Network.
"We were approached to explain the credit union model," Stapp said. "As the country reconstructs, it is an opportunity for credit unions to participate in rebuilding the economy."
The group met with representatives from the Central Bank of Libya; the Libyan Business Council; a business group from the northwestern coastal town of Misrata; and a civic and human rights group called the Libyan Liberal Forum for Democracy.
Libya's former regime did not support Islamic finance in the country, but new leadership passed an Islamic banking law in May, and public demand for Shariah-compliant services is high, said WOCCU. Local groups asked WOCCU to explain such products and services available through credit unions and how they might be implemented in Libya.
| Meeting with central bank authorities to discuss Islamic finance development in Libya through credit unions were (pictured left to right) Allaeddin Ghadyi, Lara Thomas, and Steven Stapp. Not pictured is Brian Branch. (Photos provided by the World Council of Credit Unions)|
"The first priority for the government of Libya is writing a new constitution and establishing security," Branch said. "Moving from a centrally controlled economy requires business security and contract protection. Local business councils in Tripoli and Misrata are looking for solutions to finance large-scale business."
Access to financial services remains limited in Libya. When civil war erupted there in 2011, Libya stopped producing and exporting oil, which accounted for about 70% of the country's gross domestic product. The economy contracted 41.8%. Foreign investment and aid has since declined. Events in Benghazi increased both international and local business concerns for security.
Branch said state officials and business councils are exploring ways to release central bank guarantees and financing for business.
"Most small and family businesses are self- or family-financed, and that will be the next wave," Branch said. "Consumer finance is still a new concept. Financial cooperation is still not well understood, but many are looking for an Islamic finance model. The credit union model fits."
WOCCU has implemented credit union development programs in 71 countries, including 18 African nations and a recently completed Islamic finance program in Afghanistan that established 34 Shariah-compliant financial cooperatives and points of service across the country (See related News Now story, "WOCCU expands Islamic finance in Afghanistan with new member" in today's issue.)
WOCCU has not yet had a credit union development program in Libya.