Case of the Jardín Azuayo Savings and Loan Cooperative, Ecuador: A Governance Model for Rural Outreach
This paper discusses Jardín Azuayo Cooperative (JA) from Ecuador, highlighting its key features, namely, member participation and decentralized representative governance.
With twenty of its twenty-three offices in rural areas, this cooperative has over 50,000 members in rural areas. JA has managed to achieve efficiencies through scale. Its characteristics include:
- Financial sustainability with low portfolio at risk and high operating efficiency;
- Resource dedication to member education for ensuring local development;
- Transfer of surplus resources from offices with a positive balance to offices that need resources for lending;
- Range of competitive products including loan and savings services, money transfers and electronic banking;
- Decentralized governance structures through local councils;
- Effective and increased participation of rural members;
- High trust and ownership among members;
- High growth in savings.
JA’s governance model is now considered an example of civic participation and operational control worthy of emulation. The self-financed cooperative has successfully moved from a system of self-regulation to prudential supervision by the Superintendency of Banking Insurance. It has done so through strong information and reporting systems, standardization and internal capacity.