October 15, 2009
Proxfin: a model for financial institutions shows its strength
October 15, 2009 − Three years ago, in September 2006, the international network for study and discussion Proxfin was created. Coordinated by Développement international Desjardins (DID), today this network numbers 25 community finance institutions that share the same model for performance based on integration into a network, strong ties to the community and a commitment to solidarity. Together, these institutions provide over seven million families with access to financial services that meet their needs. The great majority of Proxfin member institutions are networks of savings and credit cooperatives, and those that are not, take inspiration from the cooperative model.
These first three years of existence have enabled DID and its partner members of the Proxfin network to develop and demonstrate the great strength that the cooperative model confers. The exchanges, activities and, in particular, the international seminars organized by Proxfin have led to an impressive number of innovations, excellent financial and social performance and, more recently, an astonishing resistance to the financial crisis that has shaken the planet.
Several factors can explain this situation. First, the savings and credit cooperatives have a mission to offer products and services that must above all meet the needs of their members and clients. This is a protection against the temptation to develop and offer products that offer potential for a very high rate of return but whose high risk could worsen the already fragile situation of millions of people in disadvantaged countries. In addition, the goal of savings and credit cooperatives is to achieve a rate of return that is satisfactory and reassuring. This is a far cry from seeking profit at any cost, an approach that can, in fact, turn out to be very costly.
Furthermore, savings and credit cooperatives mobilize local savings, which makes them much less dependent on external financing for their liquidity needs. And, they have a governance structure that is based on transparency and consultation, two essential conditions for success in turbulent times.
Naturally, the member institutions of Proxfin remain extremely vigilant, aware that this crisis that may not yet be completely behind us. The theme of the upcoming Proxfin international seminar to be held November 2 and 3 in Vilnius, Lithuania, will be The Financial Crisis: Observations, Challenges and Outlook. The crisis will have had one positive result. It has shown once again the many advantages of the financial cooperative model.
For more information about Proxfin: www.proxfin.org
About DID
Développement international Desjardins (DID) is a component of the Desjardins Group and has been providing support for the creation, development and strengthening of financial institutions for over 38 years. DID is currently active in twenty countries in Africa, Latin America, the Caribbean and Europe. DID, which specializes in providing technical support and investment for community finance, draws on the rich and diverse experience acquired through collaboration with numerous partners, and on the over 100 years of experience of the Desjardins Group, the largest cooperative financial group in Canada. DID works in partnership with the Canadian International Development Agency, the Inter-American Development Bank, the World Bank and many other multilateral organizations.
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Source :
France Michaud
Communications Supervisor
Développement international Desjardins
Phone: (418) 835-2401, ext. 6026
fmichaud@did.qc.ca
www.did.qc.ca
