Case Study

Case Studies in Microfinance: Ecuador - Oscus (AMBATO) and Progreso (QUITO) Credit Unions

An analysis of the Oscus and Progreso credit unions in Ecuador
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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;
  • Evolution;
  • 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.

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