CAAP - Popular Action Alternative Savings and Credit Cooperative
Insufficient support of rural areas by financial institutions
Like in most Andean countries, financial services in Ecuador are concentrated in urban and peri-urban centres. Few financial institutions offer financial services adapted to rural populations.
In this context, rural savings and credit cooperatives are one of the most effective forms of financial institution and one that is best appropriated by local people. They function as actors of the social economy, based on the values of solidarity, transparency and democratic management. Beyond the financial services they provide, they have an important social function within their communities because they contribute to rural development.
Heading South : CAAP
Created in 2012, CAAP (Coopérative d’épargne et crédit Alternative d’Action Populaire) results from the desire of a dozen rural savings and credit cooperatives to structure themselves into a second-tier organisation in order to ensure optimal development.
CAAP’s mission is to strengthen its member cooperatives so they can offer quality financial services on a permanent basis to rural populations.
The reinforcement of grassroots cooperatives takes place at two levels:
- Non-financial: on-site training and technical assistance, particularly in financial management, savings and credit products
- Financial: funding and loans to members so they can increase their microcredit fund
CAAP & SOS FAIM
The official partnership between CAAP and SOS FAIM began in 2014, but SOS FAIM had previously supported several of the member cooperatives before they came together.
Since 2017, SOS Faim has been funding a team of two agronomy experts within CAAP, so they can support several cooperatives as part of a programme encouraging sustainable production.
This programme aims to improve families' nutrition and farmers' incomes through introducing agro-ecological practices. This activity also helps better understand their specific financial needs.
In recent years, CAAP’s member cooperatives have significantly consolidated and professionalized themselves in order to improve the scope of their services in a sustainable way.
Since 2016, the outstanding amount of loans granted to all 14 member cooperatives has increased by 23% and outstanding savings by 8%.
In addition, the two agronomists’ initial support for agro-ecological production has been very popular among both cooperatives and farmers’ groups. Women are the main beneficiaries and take ownership of the project, with the main objective of providing better food for their families.
What prospects ?
By 2021, the agricultural experts will have trained at least 350 producers, mostly women, in agro-ecological production techniques, and strengthened the capacity of cooperatives to support their members. SOS Faim will work with CAAP to learn lessons from this programme and think about upscaling.
Moreover, as Ecuadorian regulations are becoming increasingly strict on savings and credit cooperatives, CAAP will have to continue to support its members in their efforts to improve their financial services, without compromising their social function as a player in the solidarity economy.
Finally, CAAP plans to incorporate more rural cooperatives in order to extend the scope of its support.