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Credit Unions And Fintech Opportunities Abound – Fin Tech



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As countries in Africa and the Caribbean prepare for the
inaugural AfriCaribbean Trade and Investment Forum 2022
(ACTIF2022), attention is being paid to potential opportunities for
flows between the two regions to help plug knowledge and technology
gaps that exist. Two areas in which such gaps exist are the credit
union movement and fintech development.

Worldwide, the credit union movement has been making significant
strides. According to the World Council of Credit Unions (WOCCU),
of which credit unions in Africa and the Caribbean are members,
globally, there are 86,451 credit unions in 118 countries, which
serve 375 million people.

The WOCCU in its 2020 Statistical Report estimates that the
penetration rate of credit unions is 12.8%. Further, the global
body states that the 40,570 credit unions in Africa have a
membership of 40,413,389 across 27 countries. Their assets total
approximately US$16.1 billion and the penetration rate was
calculated at 14.34%.

Meanwhile, in the Caribbean, the WOCCU indicates that 18
countries have 375 credit unions with membership totaling
3,763,325. Of note is that the assets total US$10.5 billion. The
penetration rate of credit unions in the Caribbean is 65.97%, the
highest among seven regions identified by the WOCCU.

The success of the Caribbean credit unions is to be applauded.
The savings of the average Caribbean credit union member is nine
times that of African credit union members. It is believed that
these financial entities have best practices they can share with
their African counterparts to further develop the credit union
movement on the African Continent.

On the other hand, Africa has been a leader in the fintech
industry. There is strength and sustainability in the
Continent’s fintech sector, which could benefit the Caribbean
if collaborations are pursued. These alliances need not only be in
the fintech industry. KPMG suggests that there is scope for credit
unions and fintechs to be partners rather than competitors, adding
that working together would give credit unions a strategic
advantage in the innovation space. According to the 2019 Global
FinTech Adoption Index compiled by Ernst & Young, 64% of the
global population use fintech applications, four times the
percentage reported four years earlier.

There are, therefore, opportunities for the Caribbean credit
union model to be adapted for use in Africa and for African
fintechs to help credit unions in both regions take the movement to
the next level. Through fintech partnerships, credit unions can
provide their members with cutting-edge technology and innovative
payment solutions that would rival the traditional banking
sector.

ACTIF2022 comes off in Bridgetown, Barbados from September 1-3,
2022. Visit www.actif2022.com for more information on
this dynamic forum.

Originally published by Export Barbados

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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