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• Low-Income Members. As CUs grow, they seem to move beyond the "poorer" sectors of the population (as demonstrated by loan size distribution as a proxy). The variety of members helps to diversify risk. In fact, CUs can expand to serve populations at a variety of income levels without distancing themselves from low-income people. The number of low-income clients often remains the same or increases. In Colombia, for example, CUs are the only financial intermediary in some 61 municipalities.17 • Collateral. Savings can be used to develop debt capacity and creditworthiness. Savings activity allows credit union staff to become acquainted with members. As a practical matter, those members who save regularly and consistently can be expected to repay a loan regularly and consistently. A "microsavings" account facilitates access to a "microloan"—$50 in savings can help to obtain a $250 loan (if debt capacity allows it). While such a loan is only 20 percent collateralized, security is improved by virtue of the credit union's knowledge of the borrower's saving habits. Co-signers—primarily other CU members—are also a common way to guarantee loans. • Household and Microenterprise Finance. In addition to a range of business-related loans, credit unions offer a variety of financial services suited to family and women's objectives, such as household consumption and emergencies, human capital investment (loans for education and health), and other investments (housing improvement loans). The diversification of credit union loan portfolios contributes to lower credit risk. • Leadership and Policymaking. Despite the fact that CU decisionmaking bodies are supposed to represent their members, women are underrepresented on their boards of directors relative to their share in membership. Currently, credit union leadership and membership show little awareness of the potential of women as users of services and as leaders at local communities and national/international credit 17
Data provided by the Confederation de Confederation de Cooperativas de Colombia (Bogota).
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Overview: The Institutional Case Studies