Case Studies in Microfinance: Ecuador - Oscus (AMBATO) and Progreso (QUITO) Credit Unions
This paper studies the Oscus and Progreso credit unions in Ecuador. It examines the two institutions on the basis of three microfinance principles:
- Financial sector development to reduce the costs and risks of providing financial services to those who are not integrated into the formal financial sector because of low-income, gender, ethnic identity or remote location;
- Enterprise formation and growth resulting from the access to credit and deposit services;
- Poverty reduction as a result of access to reliable monetized savings facilities.
The paper studies the following aspects of the two credit unions:
- Institutional profile;
- Governance and institutional structure;
- Management information and accounting systems;
- Financial services profile;
- Savings, deposit and lending services outreach;
- Financial sustainability.
It finds that Oscus and Progreso:
- Reach large numbers of low-income people;
- are located where low-income people live or work;
- Are self-sufficient, with no external subsidies for operating expenses.
The paper concludes that in order to develop as long-term viable financial intermediaries Oscus and Progreso need to:
- Deal with members' rights vs. debt capacity;
- Gain a better understanding of the difference between their right to access credit (as owners of the credit union) and their capacity to borrow.