Legislative Expertise Links Ohio
Because of their extensive
legislative experience, the Ohio Credit Union League will play a key role in
assisting with the development of a legislative framework that ensures
the viability of kasas in Bulgaria, according to World Council of Credit
Unions, Inc. (WOCCU). As part of activities that may
result in a formalized partnership agreement between Ohio and Bulgaria,
volunteers from the Ohio Credit Union League, Kathleen Kanipe, CEO, St. Agnes-St.
John Toledo Federal Credit Union and Sara Hanselman, Ohio Credit Union
League field consultant recently participated in a People-to-People
volunteer assignment with the World Council Bulgaria project in Sofia.
"The Ohio Credit Union League
has the expertise to provide valuable legislative technical assistance to
kasas," says Paul Mercer, president and CEO of the Ohio Credit Union League.
"We look forward to assisting kasas and the WOCCU Bulgaria project office
with the challenges it will face in the future."
The WOCCU Bulgaria project began in
September 1999 and indeed faces many challenging objectives for the
future. Reacting to the numerous pyramid schemes in the mid-90s, which robbed
countless Bulgarians of their hard-earned savings, the government
passed restrictive legislation that authorized share accounts, but
prevented withdrawable deposit accounts. The laws that once meant to protect
citizens now limit their choices of financial products and services.
Another key objective of the Bulgaria project is to introduce new
legislation pertaining to kasa membership, services, regulation and
The volunteers shared in a crucial
part of the Model Credit Union building process. They worked for two weeks
with project office staff and one-on-one with kasa management to select
participants for "Model Kasa" development in WOCCU's institutional strengthening
For kasas interested in
participating in the project, WOCCU Bulgaria performs thorough two-day financial
and operational diagnostics, which include a review of the past four
years of financial statements, loan portfolio analysis and an extensive
questionnaire and interview addressing operational policies and procedures.
During the internship, Kanipe and Hanselman assisted in performing
diagnostics on six different kasas.
Kanipe and Hanselman conclude,
"After the two-week internship, we have gained a better understanding of the
work required to build a Model Credit Union System in Bulgaria and the
challenges faced by the project staff in carrying out that objective.
Moreover, we're sincerely appreciative of the WOCCU Bulgaria team and
welcomed us and made us feel like a valued part of the program. This is
an experience we will not forget."
Of the 8.5 million Bulgarians (1997
census), the kasa system serves an estimated 300,000 to 500,000 members
and provides credit to approximately 375,000 microenterprises. Even where
banks are present, kasas are the primary financial institution for
many people. The Bulgaria project is funded by a US$2.5 million grant
from the United States Agency for International Development and
carried out by World Council of Credit Unions, Inc. (WOCCU).
from Bulgarian Forum
Ohio League COO John Florian left Feb. 17 for a week in
Bulgaria where talked with government officials about how
Bulgarian cooperative financial institutions -- known as 'kasas' --
could be supported by a strengthened legislative, regulatory, and
supervisory framework. Kelly Schermerhorn, CEO of Harvest FCU in Heath and a
member of OCULís International Development Committee, accompanied
The two Ohioans participated in the first-ever Cooperative Credit and Microfinance
Policy Forum, hosted on Feb. 21 by the World Council of Credit Unions.
Florian, OCULís chief lobbyist for 10 years, discussed Ohio's
experiences in encouraging credit union safety and soundness and
growth by building a strong legislative, regulatory, and supervisory
Kelly provided e-mail updates
throughout the trip. Below are his dispatches, most recent to
Thursday, March 2, 2001 11:34 AM --
Home at Last!
My dear friends,
I have been a little sporadic in my
messages partly because I am lazy and demand 4 hours of
sleep a night, partly because access to email was not as
easy as I would have liked, and partly because I am a
speaker, not a writer. However, in conclusion, I would like
to summarize the last couple of days for you.
Friday we went to a Kraft Foods Kasa.
That's right, the very same of macaroni and cheese fame
right here in the US. They have a chocolate factory about
30-45 minutes out of Sofia with approximately 650 employees.
This is a Mutual Kasa that definitely has great potential
for success. While other factories have laid off a
significant amount of their workforce, the chocolate factory
sees only growth ahead. That means stable work, great pay
for the area, and payroll deduction is available.
The representatives we met with had many
pointed questions, not the least of which was "...why
do you keep telling everybody we need to mobilize savings?
Why do we need to offer savings products at the same time as
we offer lending?" This kickstarted an indepth
discussion of a balanced capitalization plan with many
questions going both ways to determine the best application
for the various products.
After over an hour of discussion on the
subject, they were genuinely impressed with the notion and
agreed that they would have missed a great opportunity had
they pursued the legislation without this provision (which
is a sticky one since the National Bank-public, not private
sees the savings mobilization as a major stumbling block).
They then proceeded to tell us that they had all just about
given up on the notion that they would ever be able to
revive their Kasa. They had lost the legislation due to the
banking crisis in 96-97, their members pulled out all but
the absolute minimum to keep their accounts open, and they
were making no headway towards regaining what they had lost.
When the WOCCU project team showed up and started discussing
the issues, they were skeptical, but the listened. Soon,
they realized that other Kasas had felt the same way, but
now that they were together working on the problems as one,
instead of individually, they were energized again.
They look forward to a resolution to this
matter in 12-18 months and are anxious to begin serving
their members' needs again.
I was so thankful for the honor and
privilege of being involved in this trip, that when I saw
Mike Beall at the GAC, I think even he blushed a little at
how I greeted him. I'll leave the details of that encounter
up to Mike to share.
Kelly V. Schermerhorn
President, Harvest FCU
Tuesday, February 23, 2001 7:22 AM --
Greetings, everybody. Now
that the forum is over we had a little time to get out of
Sofia and visit a Popular Kasa (like our Community Charter)
in Plavdiv (about 90 minute drive SE of Sofia on an
John (sorry, but the real spelling and pronunciation is
too difficult, so he goes by John with us) our host first
gave us an orientation on how they are incorporating the
WOCCU PEARLS system into their operation.
The Kasas input their financial data
into PEARLS for financial statements and ratios for
analysis. A companion piece of software is the Loan
Portfolio Analyser Tool (LPAT).
This companion piece allows them to
input their loan data, track payment and disbursement
activity, and provides the aging mechanism for delinquency
of the participating Kasas receives a new computer to
accommodate the software, a printer, and a UPS
(uninterruptible power source).
Each of the 14 Kasas receives training up front on PEARLS
and LPAT, including classification of
assets/liabilities/equity to allow for uniformity of input
in creating their financial statements.
Ultimately, all 14 will transmit via
email their quarterly data to the WOCCU project for import
into a master file which is used for tracking the project as
a whole, and analysing progress as relates to the USAID
now, however, they do not all have internet access and, in
some cases, have so little computer experience that the
Kasas send printouts via snail-mail and the project team
manually inputs the data into the master file.
After the orientation, John took us on a walk around the
old section of Plavdiv. The
old section is like nothing I have seen.
There are houses that have been built
on top of foundations and with walls built originally by the
a great idea; if the walls have lasted 2,000 years already,
then they will certainly last another
generation or two. This
old part of town is on the
highest ground in the area, and you can see from the apex
the old section on one side of you, with the ancient
Turkish Tile (what I have known as
Spanish Tile) roofs and, on the other side, the modern
apartment buildings of 15-20 stories.
The contrast is exacerbated by noting the narrow walkways
between the old buildings barely wide enough for two people
to walk side by side and the
four lane highway carrying thousands
of speeding cars, buses, and taxis through the high rises.
Lunch was an event in and of itself, all two hours of it,
as our host introduced us to drinks, food, and a brief
history of Plovdiv as well as Bulgaria.
I am sure that I will have gained 5
kilos by the time I leave the country as every meal includes
a substantial amount of cheese.
However, my hosts have assured me that
Bulgarian cheese is non fattening and I need not worry.
I guess I'll diet when I return to
Until tomorrow my friends,
Tuesday, February 20, 2001 5:16 AM --
John Florian, COO of the Ohio Credit Union
League, and I have arrived in BEAUTIFUL Bulgaria.
We took off from Pittsburgh at 5 p.m.
Sunday, landing in Charles De Galle in Paris at 6:35 a.m..
We looked into taking a tour by Taxi into Paris, but the 3
1/2 hours available did not seem to be enough, especially
considering we had no Francs and none of the $$ Exchange
booths were open that early.
The decision not to leave the airport
turned out to be a good one, because it ended up taking an
hour just to find the right gate for our connection. We flew
US Airways into Paris, but were taking Air France to Sofia,
and the Air France terminal is, of course, different than US
Air. You don't just get onto a shuttle or moving sidewalk to
get from one concourse to another, we had to leave the
building, catch a bus/shuttle and ride to the other
concourse. When we found the bus stop, there was a bus with
a placard in the front with the number 2 on it and we were
heading to concourse 2. If you know what happens when you
assume then you know what happened to us. We got on the bus
thinking the 2 was for the destination...HA! Stupid
Americans. Fortunately, there were a lot of peope getting on
the bus and it took a while; long enough for us to ask the
driver and find out we were on the wrong bus. I'm sure the
forty people that we had to push through to get off did not
mind at all :-)
We made it to our destination and watched
the sunrise while sitting in an airport cafe', eating fresh
Everything went like clockwork from there.
We arrived in Sofia around 1:15, zipped through baggage
claim/customs and were met by our host, John Keane, the
project director for WOCCU.
After checking into our rooms, John Keane
left us alone to explore the city while he went to greet
other forum participants that were arriving after us. John
Florian and I then set out on foot through Sofia to behold
her fantastic beauty.
The centerpiece of architecture in Sofia
is the Churches. There is one that was built originally in
the sixth century...that is very hard for me to grasp,
coming from a country that has only been around 225
years. There is a mix of купол
(the bulgarian word for which Kristina tells me there is no
english word in her dictionary, pronounced roughly Kopul
with a long o like coke) throughout the buildings. The Kopul
is a teardrop shaped structure at the top of columns and
buildings, like in the Russion Orthodox churches you have
probably seen in pictures. With Russian, Turkish, and Greek
influence, the sights are breathtaking.
I will try to be more concise with the
next few days, after I have adjusted to the seven-hour
difference and am thinking more clearly.
Credit Union League's Kathy Kanipe and Sara Hanselman visit
Development Project (from WOCCU Web site)
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© 2001 The Ohio Credit Union League