Case Study

Case of the “Jardín Azuayo” Savings and Loan Cooperative, Ecuador: A Governance Model for Rural Outreach

Demonstrating operational efficiency through decentralized governance structures

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.

About this Publication

By Rural Finance Network