Alternative Delivery Channels for Credit Unions/Financial Co-operatives : Time to act is now
By Nana Agyepong
Co-operative Governance
Posted on 18/05/2020
Immediately the President announced the lockdown of Greater Accra, Kasoa, and Greater Kumasi Area, most financial institutions especially the Banks directed their cherished customers to use the digital channels, and maintained limited workforce in the banking halls in response to ensure safety of their staff as well as customers. These measures were taken in an effort to continue providing access to financial services during the COVID-19 crisis without exposing their customers and staff to the deadly virus. More banks, retailers, consumers and governments are opting for cashless transactions now. Alternative Delivery Channels (ADCs)—which include agents, mobile money, ATMs, electronic banking, mobile banking, and cards —have the advantage of limiting disease exposure from handling cash and visiting crowded banking halls.
In other jurisdictions where financial co-operatives/ Credit Unions have such ADCs already well developed, the credit unions are leveraging them to meet members’ needs for reliable remote channels that can seamlessly deliver financial services during the pandemic.
The first credit union in Africa was established in Ghana in the 1950s. it quite unfortunate that after over six decades of credit union existence in Ghana, the movement cannot count on a reliable ADC in the industry for the benefit of its members.
Before the outbreak, ADCs were steadily growing across the world. A 2018 study by MIX found that, globally, over 60 percent of Financial Service Providers were serving clients through ADCs to improve customer experience and business efficiency. Whereas ADCs have been mostly used as secondary channels for convenience, the current crisis is underscoring the value of these channels. Ghana a pioneer in the credit union movement in Africa cannot be said to achieve much in the area of modernizing the credit union system in Ghana. I cannot agree more with the President of the republic that the pandemic should provide a positive legacy and I believe most credit unions will agree that the legacy that the pandemic should leave the movement is electronically ADC. The coronavirus pandemic appears to have tipped the scales on demand for and uptake of ADCs. Most stakeholders predict that this shift will persist and define the inclusive finance sector even after the crisis subsides.
Leveraging the potential of ADCs to navigate the crisis
What can Credit Unions, Financial Co-operatives, Department of Co-operatives, Partners of Co-operative Business model, Bank of Ghana and other stakeholders do to leverage the potential of ADCs to successfully navigate the crisis?
For Credit unions without ADCs and those with partial offerings, the coronavirus crisis is demonstrating the significance of developing robust digital capabilities to protect business continuity and retain members. It is clear that the COVID 19 has changed the way of life of people including the financial life of the larger population including members of the various financial co-operatives.
As a matter of urgency, we need to develop synergy as an industry to change our circumstance and fortune. ADC implementation needs to be complemented by the financial co-operative movement -level digital transformation to set a solid foundation. No one individual financial cooperative would be able to develop this capacity .
Together we would be able to attract the needed investment within and outside the movement to make this dream a reality. Let all support any initiative that will enable us serve our members better and also enhance performance without putting them at risk. I will encourage industry players to adopt the Financial Co-operative Support Platform (FCSP) which will change the image of financial co-operatives. The platform will enable credit unions/ financial co-operatives to have alternative delivery channels to serve the members with speed and without exposure to health risk.
The COVID-19 pandemic will have far-reaching implications. Amid the uncertainty, it is evident that the long-term winners will be financial co-operatives that invest in strengthening their ADC channels. The resulting spark in ADC investment may be a silver lining of this crisis that serves to enhance financial inclusion both during and well beyond the pandemic.
The Co-operative Governance Africa has come up with Alternative Delivery Channel that will enable credit unions and other financial co-operatives serve their members better. This initiative is worth looking at and supporting to change the image and improve traditional way of serving members.
You may visit www.coopsgov.com
Leave a Comment:
Aisha Batong Hor
Indeed, this is what is rendering me sleepless night lately.
Prince Agyei
This is really true.
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Oppong Samuel
Nice move. I think it's a pragmatic policy business players must welcome. I always call for dissolution of "CUA" Ghana because they have never added value to its members technological improvement to fit the changing world business environment. To me, I think business professionals are switching off their brains.
James
It high time we diagnosis credit union movement in Ghana. The process of understanding how CUA Ltd is currently functioning, and the information necessary to design change interventions. Those process will help us to our current situation and what need to provide to our practitioners and clients Unfortunately, in the financial sector we Cooperative Financial Institutions our stakeholders don't know us at all we are out of the system .In the economy we don't play any role and apex body is not talking on behalf. I do agree with you 100%
Kwasi Poku Attobrah
Quite positive but the challenge as I see it is the one size fits all approach. I do not see all societies ready for such transformational changes or upgrades. It should be done progressively with some selected societies and possibly expanded as and when needed. Thanks for the very insightful piece. Happy family, K.P. Attobrah (0244792400)
Thsophilus Nkegbe
I believe that we need to seriously adapt to these ADC channels in order to remain relevant in the industry. It is believe that if you don't change.... change will change you...
Dr. Mrs. Philomena Dadzie
These ADC channels has become very necessary in these periods and that's the way it must go otherwise your union will be left behind. Very well said and insightful for every union to get on board.
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