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Global economic crisis worries African CU regulators
PRETORIA, South Africa (12/4/08)--The growing global economic crisis was one of many topics discussed by financial regulators gathered for the World Council of Credit Union’s (WOCCU) second annual African SACCO Regulators' Roundtable last week.
Click to view larger imageAfrican credit cooperative (SACCO) regulators gathered in Pretoria, South Africa, last week to discuss issues facing the continent's credit unions. (Photo provided by World Council of Credit Unions)
However, fallout from the global recession could have an impact on members of the continent's rapidly growing number of credit unions, known as savings and credit cooperatives, or SACCOs. “Africa is a dynamic environment for SACCOs today,” said Dave Grace, WOCCU's vice president of association services and roundtable coordinator and host. “This factor, combined with the current global economic slowdown, presents regulators with a series of challenges few regions have to face.” In Africa, 11,849 SACCOs serve 15.1 million members, up from 2006, when 8,237 SACCOs served 13.1 million members, according to WOCCU's 2007 Statistical Report released in June. The recession, coupled with other social challenges such as the HIV/AIDS pandemic, raises the stakes on the importance of SACCOs to their members and the SACCOs' continued ability to serve in the face of such crises, Grace said. Some 40 regulators from seven African nations, Canada and the U.S. gathered in Pretoria, South Africa, for the two-day roundtable sponsored by WOCCU, the Canadian Cooperative Association (CCA) and the National Treasury of The Republic of South Africa. Impact from the global recession could severely affect food prices, which already are rising, Grace said. Also, economic downturns in developed countries often result in declines in economic aid and reductions in charitable giving, all of which could present unforeseen challenges for Africa's SACCOs, he added. Regulatory and economic issues topped the agenda, which included opening comments by National Treasury Deputy Minister of Finance Nhlanhla Musa Nene, who read a letter from WOCCU President/CEO Pete Crear to finance ministers of the G-20 countries. The letter, submitted prior to the Nov. 15 G-20 meeting in Washington, D.C., asked for recognition of financial cooperatives’ lack of culpability in any regulatory steps taken to address the global economic crisis. Other agenda topics included reviewing lessons learned in legislative development, designing supervisory systems appropriate for financial cooperatives and building service capacity among the continent's SACCOs. Roundtable participants included representatives from Ghana, Kenya, Lesotho, Malawi, South Africa, Tanzania and Uganda, all of which have SACCO-specific legislation in development.
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