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Mexican CU expands remote branch network
ZONGOLICA, Mexico (2/10/10)--Rural Mexican credit union Caja Zongolica celebrated the grand opening of two expanded rural branches Monday, an effort expected to double membership in one branch and increase financial services access among Mexico’s rural poor.
Click to view larger image Pablo Gonzalez, right, a furniture maker, applies for membership at Caja Zongolica’s Xoxocotla branch in Mexico. His membership enables him to apply for a loan to invest in tools, materials and transportation to bring his goods to market
The new branches will improve capacity of the credit union, which operates as part of World Council of Credit Unions’ (WOCCU) Mexico program, to grow and diversify its membership in the sparsely populated regions it serves. “Caja Zongolica’s expansion of these branches is exemplary of its tiered strategy to extend access to high-quality, affordable financial services to people living in marginalized rural areas,” said Brian Branch, WOCCU executive vice president and chief operating officer. “By mapping its service territory by population density, the credit union knows whether to establish brick-and-mortar branches, reach out to members through personal digital assistants or place point-of-sale technology with retail agents.” The expanded branches are located in Atlahuilco and Xoxocotla, high in the mountains where coffee production and hand-made wooden furniture are the principal industries. In Mexico, an estimated 15% to 25% of the urban population and as little as 6% of the rural population have access to financial services, according to recent studies. There is considerable demand for affordable savings and credit products from rural merchants, workers and small business owners, services sometimes difficult to deliver without a branch in the area, WOCCU said. WOCCU’s development program in Mexico is funded by the Mexican Ministry of Agriculture, Livestock, Rural Development, Fishing and Food through its Proyecto de Asistencia Técnica al Microfinanciamiento Rural project. It works closely with Caja Zongolica and more than 50 other credit unions to extend financial services to marginalized rural areas. Branch expansions like Caja Zongolica’s facilitate the extension of these services, WOCCU said.
Click to view larger image From left, Tomasa Castro, Altahuilco, Mexico, branch manager explains the branch’s expansion plan to Brian Branch, World Council of Credit Unions executive vice president and chief operating officer, and Dolores Rivera Ramirez, Caja Zongolica CEO. (Photos provided by the World Council of Credit Unions)
“Most important, we will be able to improve member service by hiring more personnel, providing a more comfortable environment, increasing service distribution and shortening members’ waiting time,” said Tomasa Castro, manager of Caja Zongolica’s Atlahuilco branch. “We were often confused with the government’s municipal office because we had been located in the same building. Now we will be seen as a completely independent institution.” The Atlahuilco branch has expanded from a single room with one teller window, a member service desk and a outdoor waiting area, to a full-size branch with three teller windows, separate desks for credit officers, an indoor waiting area and an upstairs board room that will help expand the youth financial education program at other branches. It serves 1,500 members and plans serve up to 3,000 members by year-end. Caja Zongolica’s expansion also will involve connecting all of its branches through a proprietary satellite network that operates in the absence of local Internet access or consistent cellular phone coverage in some villages. The credit union uses radios to communicate among branches, and daily financial reports are delivered on disks to credit union headquarters each night. In Xoxocotla, another one-room Caja Zongolica branch also opened its new, full-service office Monday. The town is home to nearly 3,000 inhabitants, but the Xoxocotla branch also serves the greater region populated by around 20,000 people, making the expansion key to improving member service and drawing in new business. The credit union’s only competition, microfinance bank Compartamos, operates but does not have a physical office in the region, and is known for prohibitively high interest rates. “It is very striking how strong Caja Zongolica’s community development efforts are,” Branch said. “All credit unions invest in the development of their members and their members’ families, but Caja Zongolica has a strong commitment to support the economic base of the communities it serves, and their continued rural expansion is a reflection of that commitment.”


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