Ecuador: Stability in a Time of Crisis

This case study examines two credit unions in Ecuador to evaluate key elements of their success in mobilizing savings during economic and political crises.

The two credit unions, "San Francisco, Ltd." and "23 de Julio, Ltd.", have similar characteristics, even though they operate in different markets. Both credit unions took part in the World Council of Credit Unions, Inc. (WOCCU) Credit Union Strengthening project in Ecuador, which began in 1995 and ended in 2001. Although San Francisco, Ltd. and 23 de Julio experienced setbacks during the crisis, they not only maintained their stability, but also achieved significant levels of growth and market consolidation. Savings mobilization was a fundamental component of this stabilization and growth.

These credit unions adopted policies that were key to their savings mobilization strategies. They:

• Established interest rates according to prevailing market rates and did not use them as marketing tools;
• Maintained strict financial discipline to generate stability and trust among members;
• Prioritized marketing activities;
• Increased public identification as financial intermediaries;
• Identified risks and took steps to manage them;
• Ensured that investments and loan portfolios were diversified.