EL SALVADOR CRECER RURAL FINANCIAL SERVICES COMPONENT 
INTERNAL REVIEW 
Prepared by: 
BRIAN BRANCH AND NATHALIE GONS 
- / 
Revised February 2000 " 
USAID/ El Salvador 
World Council of Credit Unions 
5810 Mineral Point Road 
Madison, Wisconsin 53705 
T . GENERAL FINANCIAL SECTOR REVIEW ............................................................................................................ 10 
A . EL SALVADOR'S FINANCIAL SECTOR ............................................................................................................. 10 
Poverty h El S(i1vador ................................................................................................................................................. I0 
The Mdn Fonnal A4icrojinance Actors ....................................................................................................................... I I 
B . 'I~E SAL.VAI)OI~AN MICI~~I:N'I'I:III'RISE SECTOR ...................................................................................................... 11 
fin(~ncic~1 Services: ................................................................................................................................................... 13 
C . EL SALVADOR'S CREDIT UNION SYSTEM OVERVIEW .................................................................................. 13 
I1 . CREDIT UNION CLIEN'I'S ............................... .,........................................................................................................ 15 
I A . WIIO ARE CREDIT UNIONS SERVING? ........................................................................................................... 15 
Clients by Occupation 1998 ........................................................................................................................................ 15 
Clients by Gender 1998 ............................................................................................................................................... 17 
111 . SAVINGS SERVICES ................................................................................................................................................. 18 
A . PROJECT CREDIT UNION SAVINGS STRATEGY ........................................................................................... 18 
Credit Union lmplemcntation of Project Strategy ....................................................................................................... 19 
B . SAVINGS OUTREACH ........................................................................................................................................ 19 
Scale of Covcr(lge ................. .. ............................................................................................................................. 19 
Depth of Covcrclge ..................................................................................................................................................... 21 
Sflvings Services to Wonten ....................................................................................................................................... 26 
Savings Services to Women ......................................................................................................................................... 27 
IV . LENDING SERVICES .............................................................................................................................................. 28 
A . CREDIT ADMINISTRATION AND PRODUCTS ............................................................................................... 28 
Depth of Coverage ....................................................................................................................................................... 34 
Scope of Coverage: Market Diversijication .............................................................................................................. 35 
Gender Covcr~ge: Loans to Women ......................................................................................................................... 36 
V . FINANCIAL PERFORMANCE .................................................................................................................................. 39 
A f . PROTECTION (PROTECCION) ......................................................................................................................... 41 
B . FINANCIAL STRUCTURE (ESTRUCTURA FINANCIERA) ............................................................................ 41 
L C . EARNINGS AND COSTS (RENDIMIENTOS Y COSTOS) ................................................................................ 45 
D . LIQUIDITY ............................................................................................................................................................ 51 
E . NONEARNING ASSETS ...................................................................................................................................... 53 
F . GROWTH (SENALES EXPANSIVAS) ................................................................................................................ 55 
VI . COMPARATIVE ANALYSIS .......................................................................................................................... 218 
A . PROJECT VS NON-PROJECT CREDIT UNIONS ............................................................................................... 58 
B . FORMAL SECTOR MICROFINANCE INTERMEDIARIES .............................................................................. 60 
VII . CONCLUSION ............................................................................................................................................................ 69 
SCALE OF MARKET COVERAGE AND DEPTH OF OUTREACH .............................................................................................. 69 
MIXED OUTREACH ............................................................................................................................................................ 70 
SAVINGS MOBILIZATION .................................................................................................................................................. 71 
FINANCIAL DISCIPLINES .................................................................................................................................................... 71 
CREDIT SERVICES AND PRODUCT EXPANSION .................................................................................................................. 72 
ANNEX A ............................................................................................................................................................................. 74 
ANNEX B ............................................................................................................................................................................. 75 
ANNEX C ............................................................................................................................................................................. 76 
ANNEX D ........................................................................ . ..... ... .......................................................................................... 81 
ANNEX E ........................................................,........ ......................................... .............................................................. 82 
EXECUTIVE SUMMARY 
The Salvadoran civil war (1980-1992) destroyed many of the productive assets financing, or serving 
as collateral for, the financial sector. Post civil war debt refinancing, restructuring and forgiveness 
programs helped restructure the private commercial bank, the public Banco de Fomento - - 
~~ro~ecuarid (BFA) and the FEDECREDITO system after productive assets and individuals had [) been destroyed. 
I In addition to the credit union sector, the main formal micro-finance actors in El Salvador include: 
(i)the public sector bank, BFA, which currently operates 27 branches and 15 agencies; (ii) the 
FEDECREDITO federation of 50 c+s de cridito; (iii) 7 workers banks; (iv) and CALPIA, created 
W in 1995 as a financial investment house with 12 branch offices. These finance the bulk of small 
agricultural, trade, livestock, and micro-enterprise loans. 
U In 1998 El Salvador harbored 31 affiliated credit unions serving approximately 55,000 
members.(WOCCU 1998 Statistical Report). World Council of Credit Unions, Inc. (WOCCU) has 
been providing technical assistance through the Rural Financial Enterprises (RFE) component of the 
three-pronged CRECER-USAID project since 1995. WOCCU's primary role in the CRECER￾RFE project is to assist credit unions to achieve and maintain self-sustainability while expanding 
outreach to low-income clients by providing technical assistance. The primary focus of WOCCU's 
technical assistance is two-fold: (i) the adoption of strict financial disciplines (ii) establishment of 
innovative savings instruments. As of 9/99 the CRECER-RFE project has encompassed 13 credit 
U unions serving 68,353 clients. 
Who are Credit Unions Serving? - 1 fl Credit unions help micro-entrepreneurs climb a delicate ladder of modest but increasing asset or 
income security growth. Credit unions help the lower income groups increase their assets via 
establishing a credit relationship, establishing an enterprise, accessing working capital, increasing 
incpme through business expansion, meeting housing credit needs, and increasing wealth through 
savlngs. 
As new members join the credit union, they are able to access credit in small amounts, increasing 
with successful repayment. Members establish a good credit history, usually by taking out small 
personal loans, and then enter into a period where they can expand their loan activity. 
Many credit union borrowers use credit to establish and expand enterprises as their primary or 
secondary economic activity. Credit union loans also become the initial capital for establishing 
micro-enterprise as the primary economic activity for other family members. Members look for 
ways to access increasing amounts of working capital with flexible repayment terms. Over time, U they rake our larger loans for housing and production needs, based on repayment rapacity and real 
These same members initially contribute little to deposit savings -- their focus is on borrowing. As 
their assets and income increase, they save more and borrow less. As they shift to larger loans or 
reduce their borrowing, members stop investing in shares and shift their investment to deposit 
savings. Members become net savers, investing savings in withdrawable deposit services offering 
market rates of return. 
Salvadoran credit unions serve a diversified client base, both in terms of occupation and member 
socioeconomic status. Urban occupations include vendors, merchants, self-employed 
microentrepreneurs, small manufacturers, teachers, construction workers, housewives, private and 
public employees, bakers, leather workers and shoemakers. Rural occupations include grain 
farmers, citrus fruit growers, agricultural laborers, traders and cattle producers. The resulting 
diversified client base helps to insulate the credit union structure from negative economic shocks. 
Of the credit union members with an identified occupation, the majority belongs to Self-Employed 
Business (self-employment in commerce, production or services) and Microentrepreneur (22%), 
followed by Public Sector Employee (10%). Female credit union clients are heavily concentrated in 
Self-Employed Business (16%) relative to other occupations 
Savings Services: 
Project activities promote aggressive marketing of savings services and membership growth. 
Technical assistance focuses on deposit services' safety (through financial management disciplines), 
convenience (through accessible location and hours, withdrawal on demand access, and minimum 
balance requirements) and returns wl~icll are competitive with alternative savings opportunities. 
/ 
When credit unions succeed in generating sufficient internal savings to meet loan demands, liquidity 
shortage and credit rationing end. The credit unions move &om their traditional position of a 
shortage of loanable funds to one of excess liquidity where they are able to both increase the 
number of loans made, and lend larger amounts for a broader range of activities. Furthermore, they 
are able to serve the credit needs of a socioeconomically diverse client base, which includes 
effectively serving microentrepreneurial clients. 
Sound institutional controls and structures need to accompany savings mobilization in order to 
protect clients' savings and to efficiently manage the increasing number of small-balance accounts. 
To meet prudential standards, credit unions must instill the financial management disciplines of 
capital accumulation, loan classification, delinquency control, loan loss provisions, capitalization, 
and liquidity management in credit union management procedures and practices. 
Project credit unions rely almost exclusively on mobilizing local savings for financing loans. 
Through 1998, eleven project credit unions serviced 31,535 share accounts and 61,353 individual 
voluntary deposit accounts. Thirteen project credit unions had a total of US$ 9 million in shares 
and US$ 17 million in individual voluntary deposits in the same period. In 1778, tkc average 
deposit savings account size was US$ 168.00. Yet, more importantly, the project median deposit 
savings account size was US$ 16.00. In other words, 50 percent of all voluntary individual savings 
deposit accounts were for amounts less than US$ 16.00. 
Deposit savings accounts are concentrated in the lower amount ranges; of which 65% are between 
US$ 0-30, and 22% between US$ 31-130. A total of 87% are less than US$ 130. In 1998, the project 
median share account size was US$ 103.00. The project average share account size was US$244.00. 
Lending Services: 
, Upon initiation of the project, it was found that the 13 credit unions offered two standard loan 
products: (i) emergency (or "manager") loans for small amounts and; (ii) cosigner loans based upon a 
multiple of 5 times the member's shares. Although all of the credit unions reported loan purpose 
and five credit unions charged differentiated rates according to purpose, the loan product was the 
same for any purpose. Loan repayment terms, frequency or amounts did not differ according to the 
client's use of the loan. 
The traditional credit union term loan is not well suited to the needs of a small-scale entrepreneur 
who needs working capital to finance inventory or meet other fluctuating demands for credit. 
Many micro-entrepreneurs or small business members do not want to tie up their funds in the credit 
union or are rationed to low amounts by the leverage system. 
To satisfy demand for working capital, the CRECER-RFE project needs to introduce new credit 
products, tailored to micro-enterprise and small rural producer financing needs. The objective is to 
offer micro-entrepreneurs products that are flexible, cognizant of their cash flow, and without the 
restrictions of traditional fixed-term, share-leveraged loans. New credit products can provide 
greater availability of small loans, as well as more rapid and convenient access to loans. 
To date, the CRECER-RFE project has done much to improveLthe project credit unions' credit risk 
analysis, credit administration process, and the collections methodology. At the initiation of the 
project, five of the thirteen credit unions carried out some form of repayment analysis for credit 
decision while the other eight relied almost entirely on simple multiple of shares lending. The 
project has introduced new credit policies and procedures, trained staff in loan repayment capacity, 
analysis, and pricing. It trained collections officers in stricter collections procedures. Delinquency 
has fallen from 36% to 13%. The project assisted participants in increasing earnings and improving 
loan quality. 
However the project has not yet introduced new loan products into which the burgeoning liquidity 
of the project credit unions might be productively directed. Credit unions need to develop new 
products offering microentrepreneurs products that are flexible, cognizant of their cash flow, and 
offering increased access with performance. The project is now engaging in local training agencies to 
train credit unions in new loan products and methodologies. This needs to be a high priority for 
the final year of CRECER-RFE implementation. 
Credit Outreach: 
Most Non-Government Organizations (NGOs) measure their credit outreach by the mean 
outstanding balance of loans. This report provides the size distribution of amount outstanding for 
all 13 credit unions and the size distribution of loans granted for the five credit unions that had this 
information available. 
This report provides the size distribution for all 13 credit unions in amount outstanding loans 
granted and the size distribution for for the five credit unions for whom that information was 
available. 
The bulk of micro and small enterprise loans are among those destined to commerce. In September 
of 1999, the 13 credit unions had outstanding 13,506 loans (39 percent), of a total portfolio of 
34,433 loans in the credit unions. Of those loans designated as commerce, women had the 
overwhelming majority of loans. Of the commerce loans, 9,523 loans with a remaining balance of 
less than US$300 were made to women and 371 loans with a remaining balance less than US$300 
were provided to men by the 13 credit unions. The average remaining loan balance for commerce 
loans is US$585 for all loans but very different for men and women: US$367 for women and US 
$2,018 for men. 
For the entire portfolio, 21,332 loans or 62% of the total number of loans outstanding have a 
remaining balance less than US$ 300. The bulk of these, 20,071 or 94% are loans to women. Loans 
with balances remaining less than US $300 make a larger portion of loans to women (75%) than of 
loans to men (16%). Loans with remaining balances between US $301 and US $1,000 account for 
another 19% of the total number of loans. Loans with remaining balances between US $1,001 and 
US $5,000 account for 17% of the total number of loans. Loans with remaining balances in this size 
category make up the largest group of loans to men (48%). 
e' 
The average remaining loan balance for all loans is US $725 for all loans: US$463 for women and 
US $1,620 for men. This 36% of per capita GDP for all loans: 29% for women and 81% for men. 
Of the project credit unions, five credit unions provided information on loans granted for 1998. 
For the five credit unions, 4,812 loans were granted in 1998. Of the sample project credit unions, 
the average loan granted during 1998 was US$ 1,416. The median loan size granted was significantly 
smaller, totaling US$ 605. 
The five sample project credit unions granted 1,541 loans less than US$ 300, which represent 32% of 
the total number of loans granted. Of this loan group, 18% (850) of the loans were below US$ 150. 
These small loans comprise 3% of the total volume of loans granted. 
Female clients of project credit unions hold 48% of the volume and 68% of the number of loans 
granted. Both genders represent a similar average loan size; the average women's loan size is US$ 
1,442, compared to the average men's loan size of US$ 1,431. Men's median loan size was US$ 635, 
while women's median loan size was US$ 701; women had a larger share of the number of smaller 
loans. 
I) Average loans disbursed as a percentage of 1997 Gross Domestic Product (GDF) per capita is, 7290 
for both women and men. Median loan size as a percentage of GDP per capita is 35% for women u and 3290 for men. 
Most Non-Government Organizations (NGOs) measure their credit outreach by the mean 
outstanding balance of loans. This report provides the size distribution of amount outstanding for 
all 13 credit unions and the size distribution of loans granted for the five credit unions that had this 
information available. 
This report provides the size distribution for all 13 credit unions in amount outstanding loans 
granted and the size distribution for for the five credit unions for whom that information was 
available. 
The bulk of micro and small enterprise loans are among those destined to commerce. In September 
of 1999, the 13 credit unions had outstanding 13,506 loans (39 percent), of a total portfolio of 
34,433 loans in the credit unions. Of those loans designated as commerce, women had the 
overwhelming majority of loans. Of the commerce loans, 9,523 loans with a remaining balance of 
less than US$300 were made to women and 371 loans with a remaining balance less than US$300 
were provided to men by the 13 credit unions. The average remaining loan balance for commerce 
loans is US$585 for all loans but very different for men and women: US$367 for women and US 
$2,018 for men. 
For the entire portfolio, 21,332 loans or 62% of the total number of loans outstanding have a 
remaining balance less than US$ 300. The bulk of these, 20,071 or 94% are loans to women. Loans 
with balances remaining less than US $300 make a larger portion of loans to women (75%) than of 
loans to men (16%). Loans with remaining balances between US $301 and US $1,000 account for 
another 19% of the total number of loans. Loans with remaining balances between US $1,001 and 
US $5,000 account for 17% of the total number of loans. Loans with remaining balances in this size 
category make up the largest group of loans to men (48%). 
f 
The average remaining loan balance for all loans is US $725 for all loans: US$463 for women and 
US $1,620 for men. This 36% of per capita GDP for all loans: 2.3% for women and 81% for men. 
Of the project credit unions, five credit unions provided information on loans granted for 1998. 
For the five credit unions, 4,812 loans were granted in 1998. Of the sample project credit unions, 
the average loan granted during 1998 was US$ 1,416. The median loan size granted was significantly 
smaller, totaling US$ 605. 
The five sample project credit unions granted 1,541 loans less than US$ 300, which represent 32% of 
the total number of loans granted. Of this loan group, 18% (850) of the loans were below US$ 150. 
These small loans comprise 3% of the total volume of loans granted. 
Female clients of project credit unions hold 48% of the volume and 68% of the number of loans 
granted. Both genders represent a similar average loan size; the average women's loan size is US$ 
1,442, compared to the average men's loan size of US$ 1,431. Men's median loan size was US$ 635, 
while women's median loan size was US$ 701; women had a larger share of the number of smaller 
loans. 
Financial Performance: 
A major component of WOCCU's technical assistance in the CRECER-RFE project has focused on 
implementing the PEARLS monitoring tool. PEARLS indicators in six key areas: Protection, 
Financial Structure, Earnings and Costs, Liquidity, Non-Productive Assets and Growth. It provides 
system standards for credit unions to measure their performance as financial intermediaries. 
, Loan loss provisions are the first line of defense for protection of savings against losses from 
delinquency. The 13 credit unions have increased provisions for loan loss to 100 percent of loans 
delinquent more than 12 months. At 27%, the credit unions have not yet reached the standard of 
loan loss provisions of 35% of those loans delinquent less than 12 months. 
Loans as a percentage of total assets have decreased from 84% in 1995 to 70% in 1999. As credit 
unions have mobilized increasing savings, they have not expanded their lending activities and 
products as rapidly. As a result, an increasing amount of the mobilized funds are invested in liquid 
investments, rising from 2% to 15% of assets by 1999. Liquid investments offer a much lower 
return of 8%, compared to 26% on loans. Therefore, credit unions need to focus attention upon 
increasing their lending activities or they will suffer decreasing profitability. 
The credit union source of funds has matured as credit unions have increasingly mobilized the more 
robust market-rate withdrawable deposits rather than depend on traditional forced-savings shares, 
which are credit driven. Deposits are substituting shares rising from 30% of assets to 55% of assets 
as a source of funds. Shares show the reverse pattern falling from 39% of assets to 24% of assets. 
External credit shows a more accelerated decrease as a source of funds fropl 17% of assets to 6% of 
assets. At an average cost of 18% for external credit compared to the cost of 9% for deposit savings, 
the decrease of dependence on external credit improves the profkability of the credit unions. 
Institutional capital (reserves and retained earnings) has risen from 5% to 7% of assets. The higher 
level continues to fall short of the international standard of 10% of assets. Slower growth of 
institutional capital reflects the difficulty of retained profits to keep up with rapidly growing assets. 
It also reflects the slowness of credit unions to move to higher loan rates supporting capitalization, 
and the decreasing profitability of credit unions as their lending activities do not keep pace with 
savings growth. 
Credit union net income has fallen from 5.9% of assets in 1995 to 3.5O/0 in June 1999. This reflects 
several changes in both rates of return and financial structure. Credit union profitability has been 
affected: 
Positively as the average return on loans has increased from 21% in 1996 to 26% in 1999 and 
negatively as the portion of assets earning as loans decreased fr~m 84% to 71%, 
Positively as the cost of deposits has decreased fr~m I lo/o to 9O/o and negatively as the share of 
deposits funding assets increased from 30% to 5So/o, 
6 
Negatively by the increasing cost of external borrowings from 10% to 18% and positively as the 
portion of assets funded by external credit fell from 17% to 6%, 
Negatively by the decreasing returns on liquid investments from 10% to 8% and negatively as 
the portion of assets in the form of liquid investments increased from 2% to 15%, 
Negatively by the nlarginally increasing operating costs from 6.6% to 7.5% of assets, 
Negatively as the return which credit unions pay on shares has increased from 0% to 6%, 
Positively by the increased amount of self owned funds, or institutional capital, generating a 
return for the credit union. 
The negative impact of increasing volume of deposit savings is a positive indication of maturity, 
competitiveness and sustainability. The negative impact of increased cost of shares is also an 
indication of maturity and competitiveness. Credit unions are approaching market rates, paying 
~iwnibers a return on their shares where they received no return before. There is little change in 
gross financial margin iron1 125 in 1995 to 13% in 1999. Thus credit unions have moved to a more 
competitive equilibrium of financial intermediation. 
The fall in net income ratios reflects temporary costs to make credit unions safer places for members 
to place their savings. The largest negative impact upon profitability has been the improved 
discipline of provisioning for long time uncollectible loans, rising from 0.4% to 2.7% of assets. This 
cost will fall again as historical losses are charged off and loan screening and risk analysis improves. 
It is expected that profitability will improve as historical losses are cleaned up and provisions fall as 
well as credit unions absorb increasing liquidity into higher levels of lending . 
Liquidity at project credit unions has increased from a low 10% of deposits in 1995 to an excessive 
26% of deposits in 1999. Liquidity reserves, set by standards to reach 10% of deposits, have risen 
from 0% in 1995 to 9% in 1999. Credit unions show an increasing depod of their liquidity from 
2% in 1995 to 45% in 1999 in the federation's Caja Central. Thg high concentration of credit union 
liquidity in the federation's Caja Central imposes a high concentration risk of the system liquidity. 
The CRECER-RFE project has focused its technical assistance and training on improved credit 
screening, loan risk analysis and collections. Delinquency, appropriately measured as outstanding 
loan balance of loans delinquent more that 30 days, decreased from 37% in 1995 to 15% in 1999. 
This still falls short of minimunl international credit union standards of 100/0. Non-productive or 
non-earning assets have risen from 8% to 10% of assets, reflecting increased credit union investments 
in computer information systems and improved physical infrastructure. 
Project credit unions show a nominal saving growth of 37% in 1996,54% in 1997, and 50% in 1998. 
Through the first nine months of 1999, savings had grown 20%. Real savings deposit gowth grew 
24% in 1996,47% in 1997,46% in 1998 and 18% through September 1999. 
In 1996, the growth of outstanding loans was 13%. During 1997, as credit unions revised their 
pricing and policies and as nsnreeoverable loans were written off, loan volume grew 15%. Loans 
outstanding then grew 19% in 1998 and 16% through September 1999, In real terms, loan growth 
was 2% and 10% in 1996 and1997, 17% in 1998 and 12% in 1999. 
7 
Comparative Analysis: 
The thirteen CRECER-RFE project participant credit union financial indicators are compared with 
the indicators of another thirteen credit unions of the FEDECACES system. Comparison indicates 
that the non-project credit unions have made marginal progress in adequate provision for loan 
losses. Financial structure evolution reveals no changes in loans to assets. A marginal increase in 
liquidity results from a shift of deposits to assets from 16% in 1995 to 28% in 1999 (compared to 
55% in 1999 for participant credit unions) and a decrease of shares from 44% to 33% in 1999 
(compared to 24% in 1999 for participant credit unions). External capital remains the same from 
1995 to 1999 at 29% of assets. With the credit union growth, institutional capital has fallen from 4% 
to 2% of assets. 
Cost of deposits has rose initially from 11% in 1995 to 13% in 1997 and then fell to 9% in 1999 for 
reasons indicated above. The return on shares remains at zero for non-project credit unions while it 
has risen from 0% to 6% for project participant credit unions. Non-project credit unions' net 
income has risen from 2% to 3%. 
Whereas delinquency has fallen from 34% to 15% for project credit unions, delinquency among 
non-project credit unions has risen from 8% to 15% from 1996 to 1999. Non productive assets have 
increased marginally form 13% to 15 % of assets. 
This suggests some overlap of deposit mobilization throughout the FEPECACES system, with 
much of the change occurring during the last two years. However, the non-project credit unions do 
not exhibit the adoption of the financial disciplines of capitalkation, provisions and delinquency 
control to protect those savings. 
Individual and consolidated credit union financial information is also compared to that of other 
formal micro-finance institutions in El Salvador. These include financiers CALPLA, the Cajas de 
Credito system, FEDECREDITO (where data is available) and four banks that have expanded in 
micro-finance lending: Banco Agricola, Banco de Fomento Agropecuario, Banco Salvadoreiio and 
Banco de Comercio. The 13 project credit union assets total 330 million Colones, CALPLA's assets 
total 229 million Colones, while the banks range from 1.7 to 13.7 billion Colones in assets. 
CALPIA operates 12 branch offices with 208 staff, whereas the 13 project credit unions have 6 
branches and operate 18 points of service with 286 staff. Banks operate between 48 and 62 branches. 
Credit union institutional capital (reserves and retained earnings) as a percent of total assets averages 
7.3% with a low sf 2.6% at Nuevo Sigh and a high af 12.1% at Sihuatehuach. Bank institutional 
capital ranges between 3.6% and 3.996, except for the state owned Banco de Pornento Agrogecuario, 
which has -5.9% institutional capital. Therefore, although nine of the 13 project credit unions do 
not yet meet minimum credit union standards for capital, all but two are better capitalized than the 
four banks reviewed. CALPIA has a strong institutional capital of 11.1%. 
The project credit unions' loans as a percent of per capita Gross Domestic Product average 55%. 
CALPIA's loans as a percent of per capita GDP were 37% in 1998 and 40% in 1999. 
Credit unions continue to pay below market returns on shares. This remains the significant 
internal subsidy of Salvadoran credit union operations. When we apply the implicit cost of deposit 
interest rates to shares (i.e. if the credit union paid the same return on shares that it pays on 
, deposits) the return to assets (net operating income to average total assets) falls from 3.0% to 2.2%. 
In comparison to the project credit union average unadjusted return of 3.0% on assets, CALPIA 
produces a 4.6% return on assets in 1999, and banks range between 0.43% and 0.76%. Banco de 
Fomento Agropecuario is the exception with a -5.8% return on assets in 1999. 
Asset Utilization (operating income over average assets) in the project credit unions is 
approximately half, at 12.9%, of that of CALPIA at 26.5%. Only Favorita approaches that of 
CALPIA at 23%, followed by Avance at 18.8%. Banks are again only half of that of credit unions, 
ranging 4% to 5%. The portfolio yield of credit unions is 26% compared to 34% of CALPIA. 
Therefore part but not all of the difference in asset utilization results from the lower credit union 
loan interest rates. A large portion of the difference resuIts from the significant amounts of credit 
union liquidity invested in low return liquid investments. 
The project credit unions demonstrate operating expenses as a percent of assets (9.9%) which are half 
as much as those of CALPIA (17.5%). Staff expenses over average assets for credit unions (at 3.7%) 
are also approximately half of CALPLA's (at 9.9%). As credit unions expand lending operations, 
tighten delinquency control exercises and expand the range of credit products, both the operating L 
expense and the staff expense as a percent of assets will increase. Such increases in operating 
expenses will be more than offset if credit unions reprogram their liquidity into these expanded 
credit operations. Other administrative expenses as a percent of assets in the 13 project credit 
unions (at 3.6%) are also approximately half of those of CALPIA (at 6.9%). 
Credit union administrative expenses, averaging looh, are lower than those of CALPIA at 17% and 
higher than those of the banks, at 4% to 5%. Similarly, credit union salary expenses average 5% and 
are lower than those of CALPIA at 10%. This reflects more investment in staff and loan analysis 
and collections at CALPIA and is manifest in higher levels of loan portfolio at risk in credit unions 
(16.2%) compared to CALPIA (4.8%). Loan portfolio control costs can therefore be paid for with 
higher provisioning costs as in credit unions or in higher staff costs as in CALPIA. The lower 
administrative and staff costs in banks reflect spreading the staff costs out across the higher volume 
of much larger loans. 
I. GENERAL FINANCIAL SECTOR REVIEW 
A. EL SALVADOR'S FINANCIAL SECTOR 
The 1980's decade in El Salvador was characterized by state development banks, which 
n~onopolized the financial market and were characterized by high delinquency and insolvency. In 
1990 the Government of El Salvador began a process of financial market reforms. These included 
, updating the financial regulatory framework, privatizing commercial banks, liquidating state banks, 
liberalizing interest rates, ending directed credit programs and creating uniform reserve 
requirements. This spurred the expansion of the private financial sector, positive real interest rates 
and savings growth. (Sanchez, Suzana. Cuevas, Carlos. Chavez, Rodrigo. El Salvador Rural 
Finance: Performance, Issues, and Options World Bank Report No. 17689-ES. April 10, 1998 p.3) 
This private sector remains highly concentrated in three large banks, (Banco Agricola, Banco 
Cuscatlh and Banco Salvadorefio), with 55 percent of the banking system's total assets. The 
majority of bank branches (57%) are located in the urban center of San Salvador. (Ibid. p.8) 
The Salvadoran civil war (1980-1992) destroyed the productive assets financing, or serving as 
collateral for, the financial sector. Post civil war debt refinancing, restructuring and forgiveness 
programs helped restructure private commercial banks, the public Banco de Fomento Agropecuario 
(BFA), and the FEDECREDITO system. Yet it also encouraged widespread borrower default in El 
Salvador. This prevalence of borrower default contributed to historically high levels of loan 
delinquency in project credit unions (36% of outstanding loans at project initiation). 
Poverty in El Salvador 
/ 
The lowest quintile of the population, ranked by income, accounts for only 3.7 O/O of national 
income, whereas the highest quintile accounts for 54.4%. (World Development Report 1998/99 
1992). Of the toral Salvadoran population, 54 O/o resides in rural areas, which cite a higher 
concentration of poverty. (ibid.). 
1 
1998 Macroeconomic Indicators 
(in millions) 
source: International Financial Statistics, Vol. LII No.10 
population 
EAP 
GDP (US$) 
GDP/capita (US$) 
6.0 
2.2 
11.9 
0.002 
l~o~ulation Below the National Poverty Line I 
(%) in 1992 
Rural lurban lnational 
I I I J 
Source: World Developlnerlt Report 1998/99 
In addition to the geographical concentration of poverty in El Salvador, there is also a gender bias. 
' In 1995 women accounted for only 33.6% of earned income (World Development Report 1998/99). 
Women's lower participation in the formal labor market reinforces the female incidence of poverty; 
in 1997 35% of the total labor force was comprised of women (ibid). In contrast, they are over￾represented in the in the lower strata of the microenterprise sector.(see section 1.B) 
The Main Fort?ral Microfitzatzce Actors 
The BFA was created in 1973 as a public sector bank, which currently operates 27 branches and 15 
agencies. Political interventions and an overall misdirection of social program goals have 
undermined the BFA's financial viability. For example, repeated debt forgiveness programs 
motivated by a social agenda have consistently produced losses due to high operating costs, low loan 
interest rates and poor loan recovery. (Sanchez et a1 1998 p.7) 
The FEDECREDITO federation of cajas de cr6dito started operation in 1943. It has traditionally 
been owned by the borrower-members of 50 rural credit cooperatives and 5 workers banks, but has 
been directed by government representatives on its board of directors. Government lines of credit, 
dispersed through the FEDECREDITO system, finance small agricultural, trade, livestock and 
microenterprise loans. 
CALPIA was created in 1995 as a financial investment house financiera) with capital contributions 
from the state and donors. CALPIA, stemming from the non-governmental organization, AMPES, 
transformed into a financiera with technical assistance from the Deutsche Gesellschaft fur 
Technische Zusamnlenarbeit (GTZ). Its mission is to provide loans to microenterpreneurs at real 
interest rates in order to obtain institutional sustainability. CALPLA operates with an innovative 
and aggressive individual lending credit program. (Sanchez et a1 1998 p.11) 
B. The Salvadoran Microenterprise Sector 
The extensive Salvadoran microenterprise study Encziestn Microempresarial1998, funded by the 
European Union and the Ministry of Economics, surveyed 1,082,064 households in 1998. The 
results reported the following characteristics of microentrepreneurs: 
A high concentration of women; 65/100 microentrepreneurs are women. 
Their operations are concentrated in urban areas. 
Only 32/100 indicated their studies exceeded 61~ grade education, and approximately 19% 
recorded no studies. 
The highest concentration of activity is found in commerce (59/100). 
The study classifies microenterprises into two types: (i) czsenta propia, which refers to those 
nlicroenterprises that do not employ remunerated labor and; (ii) patrono, which refers to those 
microenterprises that employ at least one wage earner. (Encuesta Microempresariall998, p15) 
The majority of microentrepreneurs fall under the former category, and is highly dominated by 
women (70/100). The latter is predominantly comprised of men (61/100). (ibid.) The gender 
distribution in this classification set implies wonlen face greater constraints in the microenterprise 
sector. 
The survey additionally classifies microenterprises into three types according to monthly 
snles/income: srrbssistcnce, modest dccrrnzrrlrltion, and greater accrrmrsiation. The former is 
predominanly comprised of women, whereas the latter of men. (Ibid., p.2) Modest accumulation 
microenterprises observe an approximately equal representation of both genders. The gender 
distribution in this classification set also implies that women face greater constraints in the 
microenterprise sector. 
The overwhelming majority of new entrants to the extant microentrepreneurial sector are female. 
Ten percent of the total surveyed microenterprises have been in operation for only 1 year or less. 
These novice microentreprises are predominantly cuenta propia and operated by women.(ibid., p.22) 
/ 
The survey states that high female entry reflects the national detgrioration of living standards that 
force women to generate a supplementary household income (ibid.,plO). A significant proportion 
of female microentrepreneurs (38.2 Oh) cited having the additional obligation of maintaining the 
household (labores del hogar) compared to 2.7% of men. (ibid., p20). The ad hoc nature of this 
female entry suggests that women occupy a more precarious niche in this sector. 
In conclusion, women face greater constraints for microenterprise growth. They report the lowest 
monthly earnings, generally do not employ remunerated labor and oftentimes must balance their 
income-generating pursuit with household duties.(ibid.,plO) Furthermore, female 
microentrepreneurs cite a lower remuneration: 77.3% of women earn up to 2000 colones ($230), 
compared to 56.2% of men.(ibid., p4) 
B fitratzciaZ Services: 
The microenterprise sector's gender bias is paralleled in the sector's credit supply and demand; in 
general women access fewer loans than men. Women's loans also tend to be of a smaller size - 
relative to men. 
Both genders cited personal savings as their primary source for start-up capital (48% of total 
' respondents), followed by loans from friends or relatives. The amounts did vary significantly per 10 gender, with 41/100 men securing amounts of more than 2000 colones ($230) compared to only 
22/100 women. (ibid., ~27). 
Approximately 2196 of established microenterprises have sought at least one loan; only 19% of those 
who applied received a loan. Of those who received a loan, the primary sources of credit for these 
established microenterprises are commercial banks (25.3%), FEDECREDITO (19.5%), and 
CALPIA (8.910). (ibid., p5) About two-thirds of these established rnicroentreprencurs demanded 
loans up to 5000c (US$575), of which 3O/IOO sought loans up to 1000c ($115), and 31/100 up to U 5000c (USS575). (ibid.) 
The estimated demand for credit in 1999 is 2,283 million colones ($262.4 million), referring to U 100,847 microentrepreneurs that intend to secure loans throughout this year. (ibid., p6) 
Two-thirds of women anticipate loans up to 5000 colones ($575) whereas roughly half of the men 
U will seek loans greater than 10,000 colones ($1,149). (ibid., p76). 
/ 
L 1m C. EL SALVADOR'S CREDIT UNION SYSTEM OVERVIEW 
The national federation, Federaci6n de Asociaciones Cooperativas de Ahorro y Credito de El 
Salvador (FEDECACES) was formed in 1966. FEDECACES was established to serve as a trade 
association and to provide technical assistance support for the national CU network. FEDECACES 4 established a credit department to provide short term-liquidity loans to affiliated credit unions 
(CUs). Currently FEDECACES provides services to harbored 3 1 affiliated credit unions serving 
approximately 55,000 members. Of the non-affiliated CUs there are 7 large CUs which also [I mobilize significant deposits. 
FEDECACES and credit unions (CUs) fall under the supervision of the general Salvadoran Institute 4 for the Promotion of Cooperatives (INSAFOCOOP) of the Ministry of Agriculture. CUs are 
currently regulated by the general cooperative law, Ley General de Asociaciones Cooperativas of 
1969. The same law is responsible for all types of cooperatives in El Salvador. The Salvador Law of 'I Banks and Finance Companies applies to banks, finance companies and those institutions which 
I) obtain funds from the public by receiving deposits, or issuing paper but has not been applied to 
credit unions in El Salvador to date. 
World Council of Credit Unions, Inc. (WOCCU) has been providing technical assistance through 
(I the Rural Financial Enterprises (RFE) component of the three-pronged CRECER-USAID project 
since 1995. WOCCU's primary role in the CRECER-RFE project is to assist credit unions to 
achieve and maintain self-sustainability whilst expanding outreach to low-income clients by U providing technical assistance. The primary focus of WOCCU's technical assistance is two-fold: (i) 
, the adoption of strict financial disciplines (ii) establishment of innovative savings instruments. 
As of 9/99 the CRECER-RFE project encompassed 13 credit unions serving 67,817 clients. The 
U project credit unions are La Uni6n, Dinimica, Unidad, Progreso, Nuevo Siglo, La Favorita, Solidez 
Total, El Esfuerzo, Principal, Sihuatehuac6n, Uno, Avance, Unica. 
Table 1 
13 Project Credit Unions Savings & Lending Activities (in US Dollars) 
December December December December September 
1995 1996 1997 1998 1999 
DEPOSIT SAVINGS I 
1 
Volume Savings $5,524,224 1 $7,543,207 1 $1 1,609,2 1 1 1 $17,364,583 1 $20,787,924 
Volume Shares 1 $7,046,252 1 $7,945,807 ( $8,499,740 1 $8,709,331 ( $9,080,632 
Volume of Loans 
Number of Loans 
11. CREDIT UNION CLIENTS 
A. WHO ARE CREDIT UNIONS SERVING? 
Outstanding I I 
Clients by Occupation 2998 
Salvadoran credit unions serve a diversified client base, both in terms of occupation and member 
$15,292,430 
I 
socioeconomic status. Urban occupations include vendors, merchants, self-employed 
microentrepreneurs, small manufacturers, teachers, construction workers, housewives, private and 
public employees, bakers, leather workers and shoemakers. The latter three are classified as 
Microentrepreneurs and Self-Employed Business (self-employed in commerce, production or 
services). Rural occupations include grain farmers, citrus fruit growers, agricultural laborers, traders 
and cattle producers, which are classified as self-Employed Agriculture and Self-Employed Business. 
$17,150,966 
The resulting diversified client base helps to diversify risk. For example, an economic sector-specific 
collapse is not synonymous to the credit union's collapse; only a proportion of the credit union's 
clientele would be adversely affected. 
15 
$38,610,477 
ASSETS ;7;,trj;fi~.y~;~;i~.it";:~ y fi : -- .: .,,i!.*l fg qtvd ,,$, ;: '. . " ,; , :- ,;'p:$~~:,:J~~~~:g$y~:k. :J 
,:?: ,) ~~.~\;;;,T~:;,2$ q,: 4 ',h.ii;, ',. i . ',ir:+b<4Fk ;:., . , ,q.;, ,;:p- ,,2*-.,kjtf..L 
$,b ,+,. ,,I, , . <. !I., .. \i;:b+t*. , ., ;;!.'!.7;!< , , ,, , ,, ., ; :;) ,:: * ,;:ky"*:;,:f5;r$,;),;b 
$19,682,334 
Total Assets 
$23,632,18 1 
23,237 
$26,719,005 
24,791 
$18,171,369 $21,63 1,08 1 $26,083,414 $33,069,707 
Total Mombors-by-Occupation 
0 M~croenlrepreneur 
Homemaker 
OPubllc Seclar Em~loyee 
WPr~vale Seclor Employee 
nsludenl 
l Refbred 
OSell.Employed Agf~culture 
lOlher 
BNo enlry 
??'A .._ -. -- . 
'The credit union membership data occupational classification contains several overlapping 
categories. For exanlple, Self-Employed Business (self-employed in commerce, production or 
services) implies Microentrepreneur (even though the converse is not necessarily true). Of the 56% 
clients with an irtcnrified occupation, the majority belongs to Self-Employed Bt~siness and 
Microcntreprcncur (22%), followcd by Public Sector Employee (10%). 
Furtherri~ore, the data r.cflects an occupational profile of credit union clients by gender that is 
consislent with thc Em~rcstn Micla~~np~cw~jcrl 1995 result of a concentration of fcrnale 
n~icroet~trcprcrleurs inconimerce and scrviccs (Etzcrtcstn Alicl-oc),1prcz~irinI 1338, p 17, Cud ro No 10). 
I:r~ildc crcdit ullion clients i11-c lmvily concc~~trlted in Sell-Elnploycd ~tlsibcss (self-employnsnt in 
commerce, production or services) relative to other occupationsi-(l60/o), whereas men report an even 
distribution between Self-Employed Business and Public Sector, and a relatively even distribution 
between Microentrepreneur and Private Sector occupations (13%). Furthermore, men are relatively 
not as concentrated in one sector; men note a 4% difference between employment in the private 
sector and the rnicroentrcprise sector. Women, on the other hand, arc concentrated appruxinxdy 
10% higher in Self-E~n~loyed Husincss than ~IIIY other sector. 
Female Clients by Occupation 
13 
Clietrts by Gender 1998 
In 1998 the project credit union client base consisted of 8% more women than men. 13 
111. SAVINGS SERVICES 
What most distinguishes credit unions from other non-bank financia1 entities offering 
microfinance services is their ability to mobilize mass numbers of small and voluntary savings 
accounts. Credit unions provide the low transaction costs requisite for maximizing outreach 
in savings service. The project credit unions serve approximately 55,000 savings clients to 
fund loan operations at an operating cost of approximately seven percent of assets. 
Project activities promote aggressive marketing of savings services and membership growth. 
Technical assistance focuses on deposit services' safety (through financial management 
disciplines), convenience (through accessible location and hours, withdrawal on demand 
access, and minimum balance requirements) and returns which are competitive with 
alternative savings opportunities. 
In 1976 all credit unions operated with non-withdrawable shares as the primary source of 
savings. Of the 13 credit unions, ten paid no return on shares. All offered a passbook savings 
account and nine credit unions offered term deposit services. 
In 1996, passbook savings interest rates ranged from seven to ten percent. This compares with 
five to seven percent in 1999; this decrease reflects two factors. Interest rates have decreased in 
the Salvador financial sector. Credit unions have begun to compete with more professional 
image and aggressive savings campaigns. Consequently they are less reliant on paying large 
premiums on savings deposits in order to maintain competitiveness. The combined passbook 
and term deposits accounted for 35 percent of assets at the beginning of 1996. 
A. PROJECT CREDIT UNION SAVINGS STRATEGY +' 
Project credit unions have followed a three-step process. The first step occurred during the 
project institutional strengthening process. This involved an expansion of the savings services 
which credit unions already offered. Most credit unions offered a passbook savings account 
and some offered a term savings account, but usually only one rate for all amounts and all 
terms. Credit unions moved to offer scales of market-based increasing interest rates with 
higher amounts in passbook accounts and with increasing terms for term accounts. 
The second step involved expanding the credit union competitive strategy beyond simply 
competitive interest rates. Credit unions engaged in an aggressive project-led campaign to 
upgrade physical infrastructure and staff appearance to strengthen their professional image. 
They established color, logo and graphic images to promote public recognition and to diffuse a 
wide advertising and slogan campaign. 
The third step involved the introda~stion of new services. New savings pradusts ware 
introduced by the project at the beginning of 1738 alter the core institutional strengthening of 
most credit unions was completed. As of October, several credit unions llavc ildded yotrtli 
savings, institoitionn1 savings and programmed savings products to their offerings. 
Credit unions now offer a variety of types of savings services: (i) voluntary withdrawable 
savings accounts; (ii) fixed term deposits based on either the term of the deposit or the size of 
the deposit; and (iii) diverse savings programs including: savings for educational fees, savings 
for holidays or vacations, savings for infant delivery expenses, retirement savings, youth 
savlngs, etc. 
Credit Union Implementation of Project Strategy 
Most of the project credit unions, such as Union and Principal, diffused savings across many 
small accounts. Yet in 1996 some of the credit unions exhibited high degrees of deposit 
account concentration. For example, Sihuatehuacbn and Nuevo Siglo accounts were 
concentrated in few savers; at Dinamica 205 of its 3,800 accounts had 70 percent of the credit 
union savings. Solidez Total's savings deposits were concentrated in eight large accounts. 
Forty four percent of Unidad savings were from six depositors. These accounts were often 
"hot money", very sensitive to changes in the interest rates. Consequently the credit unions, 
which had only recently begun to attract deposits, faced large potential fluctuations in their 
savings base and high cash flow risk. The project savings mobilization campaign and 
information system assistance has helped credit unions expand the base of many small 
deposits, which provides a stable base of funds. 
The large proportion of savings by non-members in credit unions such as Uno and Progreso 
further exacerbated cash flow and asset liability management risk. The project has assisted 
credit unions to reduce obstacles for membership status, such as the prerequisite time￾consuming training courses. 
When credit unions succeed in generating sufficient internal savings tvmeet loan demands, 
liquidity shortage and credit rationing end. The credit unions move from their traditional 
position of a loanable funds shortage to one of excess liquidity where they are both able to 
increase the number of loans made and lend larger amounts to a broader range of activities. 
This includes effectively serving microentrepreneurial and small rural producer clients. 
Sound institutional controls and structures need to accompany savings mobilization in order 
to protect clients' savings and to efficiently manage the increasing number of small-balance 
accounts. To meet prudential standards, credit unions must instill the financial management 
disciplines of capital accumulation, loan classification, delinquency control, loan loss 
provisions, capitalization, and liquidity management in credit union financial management. 
B. SAVINGS OUTREACH 
Scale of Coverage 
Project credit unions rely almost exclusively on mobilizing local savings for financing loans. 
Through 1998, the project credit unions serviced 31,535 share accounts and 61,353 individual 
O voluntary deposit accounts. Project credit unions had US$ 8 million in shares and US$ 8.5 
million in individual voluntary deposits in the same period. 
1998 Individual Voluntary Deposits 1998 Share Accounts 
In US$ I::-\ I In US$ I:">\ 
kredit Union I Number I Volume I Number I Volume I 
IE~ Esfuerzo 1 3.2081 593.1601 2.2821 5 l0.030l 
ILa Favorita I 1.5111 207.7151 1.6221 326.3651 
(") Sample does not include Unica 
('e'r) Sample does not include: Unica, Nucvo Siglo. 
Coop Ur~o 
'I'OI'ALS 
The 13 ~roject credit unions' 1998 total savings, which includes all savings products to all 
customers, was C 15 1,07 1,876. 
Depth of Coverage 
13,437 
61,353 
Project credit unions have demonstrated an ability to successfully offelfsavings services to its 
mixed clientele. The size of savings and shares is a relatively. accurate proxy for income level; 
hence small deposits suggest a low-wealth client. To identify credit union savings outreach to 
the lowest socioecononiic groups, the median is the most accurate measure of the 
distribution's central tendency, especially when many snlall amounts and few large amounts 
skew the total distribution. The mean value is inflated toward representation of higher-end 
borrowers. 
Sunm~ary Statistics 
740,187 
8,494,822 
Individual Voluntary Deposit Accounts 
In 1998, the project average individual voluntary deposit account size was US$ 168.00. Yet, 
more i~~lporranily, tlic project niediatl iudividual voluntary deposit account size was US$ 
16.00. In other words, 50 percent of all voluntary individual deposit accounts were for 
amounts less than US$ 16.00. 
4,159 
3 1,535 
957,178 
7,993,603 
I Surmlary Statistics for 1998 Individual Voluntary Deposit I 
IEI Esfirerzo 1 1851 141 571 45,9771 
Savings - In US$ 
[La Favorita 1371 161 .571 15,5171 
[La Union 1351 171 .571 23,2371 
Max 
17.24 1 
Min 
.57 
Credit Union 
Avance 
[Solidez Total I 1651 161 .571 37,3561 
Nuevo Siglo 
Principal 
Progreso 
Mean 
70 
J~aern~e 1681 161 . 581 29,6861 
Sample does not include Unica 
Median 
12 
387 
164 
137 
Unidad 
Coon Uno 
The minimum and maximum values are also noted since they further dissect the aggregate 
figures that obscure credit unions' service to the poor by recording the distribution's lowest 
and highest values. The project individual volutltary deposit account distribution exhibits a 
minimum value of .58 and a rnaxitnum of US$ 29,686.00. 
Share Accounts .' 
17 
13 
2 1 
9 1 
55 
In 1998, the project median share account size was US$ 103.00. The project average share 
account size was US$ 244.00. 
I Summary Statistics for 1998 Shares In US$ I 
-69 
.57 
.57 
18 
13 
l~redit Union ( Mean ( Median ( Min I Max 
29,966 
57,47 1 
9,113 
1 Avance 246) 1301 1,151 2,479 
.57 
.57 
[El Esfuerzo 1 2231 1291 0.571 2,12C 
7,482 
22.972 
F;tta l.Xll 2,635 
23,108 
Princi a1 0.57 12,863 
Pro reso 26 1 146 1.15 4,627 
Sihuatehuacin 312 9 2 1 .OO 14.845 
ISolidez Total I 4931 2811 3.001 2,2541 
Unidad 
Coop Wns 
R verage s 
157 
238 
244 
4 1 
65 
1 Qd 
1.15 
0,57 
Q.97 
2,038 
27,886 
5,534 
f91 Sample does not include Unica, Nuevo Siglo. 
m 
B I 
I3 
C1 
U 
U 
U 
0 
11 
U 
1;1 
11 
CI 
LI 
The project share account distribution has a minimum value of .97 and a maximum of US$ 
8,543.00 indicating the distribution's endpoints. 
11 Distribution of Deposit and Share Accounts by Range 
Deposit savings accounts are concentrated in the lower amount ranges; of which 65% are 
bctwecn US$ 0-30, and 22% between US$31-130. A total of 87% are less than US$ 130.00. 
I 
U This large bottom tier provides a mere 12% of deposit funds. A middle tier of moderate-sized 
accounts provides approximately 10% of deposit funds. Lastly, a very small third level, 
consisting of relatively large accounts, provides approximately 78% of the deposit funds (see 
Annex B). 
Total Number of Deposit Accounts by Range 
5% 
The majority of credit union share accounts(60%) have less than USd130.00, of which 43% is 
below US$ 30.00. This majority of small accounts provide only 7% of the total shares 
volume. 
Shares are largely invested for the purpose of acquiring access to credit. Therefore, share 
accumulation patterns largely reflect those members who are seeking credit, rather than 
savings services in their own right. The large number of very small share accounts indicates 
credit union service focuses on lower income groups seeking membership or access to loans. 
Total Volume of Share Accounts by Range 
1 % 6% 
Total Number of Share Accounts by Range 
Srzvings Services to Wometz 
I 1998 Individual Voluntary Deposit Accounts 
I Women I Men 
Both genders cxhibit a similar distribution of voluntary deposit accounts, in terms of number 
and volume of account. Both genders hold the highest number of voluntary deposit accounts 
(over 60%) in the lowest savings range ($0-30). Women represent 35% of the total number of 
accounts in this bottom range, proximate to men's representation of 30%. 
I 
The mass majority of account volume for both genders is derived from deposits in the highest 
range of accounts greater than US$ 501.00; female-held deposits locate 75% of their total 
volume in this range, proximate to the 81°/o exhibited by men. 
1998 Shares / 
Women 11 Men 
%volume 
men 
3% 
7% 
4% 
4% 
81% 
Amount 
US6 
$0 - 30 
$31 - 130 
$131 - 260 
$26 1 - 500 
$501 + + 
% # 
total 
35% 
12% 
3% 
2% 
3% 
% # 
Women 
65% 
22% 
5% 
3% 
5% 
Since both genders are subject to obligatory shares, it is not surprising that the distribution of 
share accounts is similar for both genders. Forty-two percent of all female share accounts and 
44% of all male share accounts are located in $0-30 range. This marked concentration of 
accounts in the lowest range suggests a substantial number of credit union members are low￾wealth and seek access to credit. 
%volume 
total 
1% 
4% 
2Yo 
2% 
41% 
# 
16,642 
5,657 
1,357 
743 
1,303 
volume 
128,05 
304.13 
189,40 
193.71 
3,512.17 
Amount 
US$ 
$0- 30 
S 31-130 
5 131-260 
S 261-500 
$501 + 
% # 
men 
44% 
17% 
14% 
11% 
14% 
Oh volume 
women 
4% 
9% 
6% 
6% 
75Yo 
% # 
women 
42% 
1790 
14% 
11% 
16% 
% volume 
total 
2% 
4% 
3% 
3% 
37% 
96 # 
total 
23% 
9% 
8% 
6% 
9% 
% # 
total 
20% 
8% 
6% 
59'0 
6% 
%volume 
men 
1 Oh 
640 
12% 
18% 
63% 
# 
6,677 
2,662 
2,093 
1,674 
2,141 
volume 
175,253 
360,782 
250,205 
267,833 
3,181,368 
# 
7,658 
3,094 
2,521 
2,040 
2,846 
%volume 
total 
1 % 
2% 
5% 
7% 
26Yo 
%volume 
women 
1% 
6% 
12% 
18% 
63% 
volume 
50,377 
208,832 
395.66C 
603,111 
2,177,949 
# 
14,179 
4,675 
1,051 
532 
1,136 
% # 
Men 
66% 
22Yo 
5% 
2% 
5% 
% # 
total 
30% 
10% 
2% 
1% 
2% 
Oh volume 
total 
12 
4% 
7% 
11% 
38% 
volunie 
51,944 
298,670 
598,585 
925,655 
3,207,602 
IV. LENDING SERVICES 
A. CREDIT ADMINISTRATION AND PRODUCTS 
The traditional credit union loan is a term loan. The member borrows a fixed amount 
relative to their shares and pays it back over a fixed period with regular installments. This 
pattern is particularly well suited to the individual who is taking out a consumer loan or is 
purchasing a piece of equipment or property. He/she needs a large amount of money at the 
beginning to make the purchase, and then pays it off over time, out of current income. 
This methodology, however, is not well suited to the needs of a small-scale entrepreneur who 
needs working capital to finance inventory or meet other fluctuating demands for credit. 
Many rnicrocntrepreneurs or small business members do not want to tie up their funds in the 
credit union or are rationed to low amounts by the leverage system. They express a desire to 
borrow based upon their demonstrated repayment capacity and ability to offer collateral for 
guarantees. Many small artisan and self-employed producers chafe at monthly loan repayment 
and seek quarterly payments. 
Upon initiation of the CRECER-RFE project, the 13 credit unions offered two standard loan 
products. The first type, emergency loans, are provided for small amounts on signature for up 
to 12 months. These are called "manager" or "automatic" loans and are often granted up to 
80% or 90% of the client shares. Interest rates on these loans tend the much lower (12% 
compared to 21% on other loans) and loan amounts are restricted to small amounts (limited to 
2,000, 3,000 or in two cases, up to 10,000 Colones). These loans can be approved directly by 
the manager in five of the thirteen credit unions. 
The second loan product is based upon a multiple of 5 times the member's shares and requires 
cosigner guarantees. Loans were reported available for different purposes and five of the 
credit unions reported different interest rates for loans. Although all of the credit unions 
reported loan purpose and five credit unions charged differentiated rates according to purpose, 
the loan product was the same for any purpose. Loan repayment terms, frequency or 
amounts did not differ according to the client's use of the loan. Currently, mortgage loans are 
available for longer-term lending (up to 48 months), but are still based upon a multiple of 5 
times the sum of savings and shares. 
Clients' financing needs include housing construction and improvement, home purchase, 
small manufacturing, transportation business, commerce, personal service business, debt 
refinancing, emergency needs, education, agriculture, cattle- and chicken-raising, fish￾harvesting, personal expenses and electric appliance purchases. 
Loan purpose should determine clients' credit union loan product offerings. For example, 
most clients in the agricultural sector borrow for longer-term repayment. Citric producers 
borrow fixed, 6-month term loans, which they pay at end of harvest instead of monthly. 
Cattle producers often require a 2-year repayment period that allows for their cattle to reach 
an optimal selling age. 
The introduction of new methodologies and credit products tailored to low-income 
entrepreneurs has introduced credit unions to a greater variety of services for this sector. To 
satisfy denland for working capital, the CRECER project is now providing training in new 
credit products tailored to the microenterprise sector and small rural producer financing 
needs. The objective is to satisfy demand for working capital, namely by offering micro￾entrepreneurs products that are flexible, cognizant of their fluctuating cash flow, and free 
from the restrictions of traditional fixed-term, share-leveraged loans. New credit products can 
provide greater availability of small loans, as well as more rapid and convenient access to 
loans, using the following procedures: 
incrcasirig access to future loans based on satisfactory repayment of previous loans; 
availability of terms that match the enterprises expenditure patterns and need for working 
capital and short loan terms; 
quick turnaround on loan approvals; 
minimum transaction costs including local access, simple application procedures, etc; and 
few restrictions on use of funds. 
CALPIA offers Salvadoran micro-entrepreneurs a variety of credit products with varied 
intcrcst rates, tcrms and payment frcqucncies to match the loan purpose. CALPIA offers: 
,' 
Micro-enterprise loans up to 45,000 Colones at 36% for commerce or service and 30% for 
L production with weekly, biweekly or monthly payments and terms up to 24 months for 
working capital and 48 months for fixed assets, 
Seasonal credit up to 30,000 Colones at 42% for working capital up to 60 days, 
Automatic loans up to 100,000 Colones at 27% for working capital up to 24 months with 
monthly or biweekly payments for preferred clients with strong credit record, 
Small enterprise loans up to 500,000 Colones at 21% for commerce or service and 18% for 
production with monthly payments and terms up to 24 months for working capita1 and 48 
months for fixed assets, 
Agricultural loans up to 45,000 Colones at 30% with monthly or seasonal payments, 
Other WOCCU projects have designed and introduced credit products for implementation in 
credit unions. These have included: 
Pre-Approved Line of Credit: The member may draw the line up as credit is needed and 
pay it down with cash flow. This product is designed to meet small and micro enterprise 
working capital needs. 
Supplier Advances: Micro-enterprise credits of this nature are arranged through a 
cooperative agreement between the credit union and an input supplier. The credit union 
pays the supplier for the member expenses at the pre-arranged discount rate. The main 
purpose of the loan is to purchase raw materials, furniture, and equipment. The loan term 
is for up to 6 months. 
Letter of Credit: This is a document loan by which financial support is granted to the 
member through third parties. The purpose of the loan is purchase raw materials and/or 
inventory. The term of the loan is 3 months. 
I'urchase ol Debt Portfolio (Factoring): The member transfers hidher accounts-to-pay 
portfolio to the credit union in a discounted form, enabling the credit union to execute the 
collection process. The purpose of the loan is to finance working capital. The loan term 
doe not exceed 3 months. 
To date, the CRECER-RFE project has done much to improve the credit risk analysis, credit 
administration process and the collectio~ls methodology of the participant credit unions. At 
the initiation of the project, five of the thirteen credit unions carried out some form of 
repayment analysis for credit decision while the other eight relied almost entirely on simple 
multiylc of shares lending. The project has introduced new credit policies and procedures, 
trained staff in loan repayment capacity analysis and pricing. It trained colIections officers in 
stricter collections procedures. Delinquency has fallen from 36% to 13%. The project assisted 
participants in increasing earnings and improving loan quality. 
However the project now needs to focus upon introducing new loan products into which the 
burgeoning liquidity of the credit unions might be productively directed. Credit unions need 
to develop new products which offer microentrepreneurs flexible prodwts that are cognizant 
of their cash flow and which determine access on the basis of performance. The project is now 
engaging in local training agencies to train credit unidns in new loan products and 
methodologies. This needs to be a high priority for the final year of CRECER project -RFE 
implementation. 
B. CREDIT OUTREACH 
Most credit unions measure the scale of their credit outreach by the mean, median and size 
distribution of loans granted. Most Non-Government Organizations (NGOs) measure their 
credit outreach by the mean of loans balance outstanding. Usually this is because most NGO 
tracking systems have more difficulty with tracking the amount granted than the outstanding 
balance. The use of outstanding balance provides a downward bias in size measurements than 
the amount granted for obvious reasons. This report provides the size distribution of amount 
outstanding for all 13 credit unions and the size distribution of loans granted for the five credit 
unions that had this information available. 
Small loans are used as an indicator of the depth of credit union services to the poor. USAID 
uses loans with an average balance of less than $300 per borrower as a working definition of 
poverty lending. Loans under this threshold are assumed to be reaching the poorest 
borrowers. 
Outreach: Balance Outstanding 
Data presented here includes the outstanding loan balances at September of 1999. The 
amount of principal granted was not available in most cases due to a lack of system 
U standardization and a failure to report the loan principal amount. The global amount per 
credit union does not match with that of 9/99 PEARLS report due to adjustments made to the 
loan portfolio after data collection. In general, because the information is not static, the , 
U outstanding balance as of a certain date always differs from that of PEARLS report. 
Women Men Total I 
The bulk of micro and small enterprise loans are among those destined to commerce. In 
September of 1999, the 13 credit unions had outstanding 13,506 loans, the second largest share 
(39 percent), of a total portfolio of 34,433 loans in the credit unions. Of those loans 
designated as commerce, women had the overwhelming majority of loans: 11,719 versus 1,787 
for men. Of the commerce loans, 9,523 (81% of a total 11,719) loans wit% a remaining balance 
of less than US$300 were made to women and 371 (21% of altotal 1,787) loans with a 
remaining balance less than US$300 were provided to men by the 13 credit unions. The 
average remaining loan balance for commerce loans is US$585 for all loans but very different 
for men and women: US$367 for women and US $2,018 for men. This suggests that women's . .. commerce activities are smaller scale than men's actlvltles. 
I Women Men Total I 
Loans designated for consumption make up the largest share, (44 percent) of the total loan 
portfolio. The average remaining loan balance for consumption loans is US$741 for all loans: 
US479 for women and US $1,450 for men. 
In September of 1999, the 13 credit unions had outstanding 5,408 loans, a smaller share (9 
, percent), of the total portfolio. Of housing loans, 1,254 (58% of a total 2,146) are women's 
loans with a remaining balance of less than US$300 and 92 (8% of a total 1,116) are men's 
loans with a remaining balance less than US$300. The average remaining loan balance for 
liot~sing loans is larger than other purposes US $1,182 for all loans: US$802 for women and 
US $1,914 for men. Men's loans, a11.hough only half as frequent as women's loans are 
approxi~nateky twice the average si US $1,182 US $1,182e of women's loans. 
Women Men Total 
I Women Men Total I 
Loans not identified, except as "other," make up 7 percent of the total number of loans 
outstanding. ,' 
O/o 
0.2 
0.9 
13.0 
50.2 
35.7 
100 
L 
Women Men Total I 
Ihsing 
0.1 50 
!?!2!??-p~-. 
301-1000 
1001-5000 . - -- -- 5001 + 
'l'otrl 
For the entire portfolio, 21,332 loans or 62% of the total number of loans outstanding have a 
remaining balance less than US$ 300. The bulk of these, 20,071 or 94% are loans to women. 
Loans with balances remaining less than US $300 make a larger portion of loans to women 
(75%) than of loans to men (16%). Loans with remaining balances between US $301 and US 
$1,000 account for another 19% of the total'number of loans. Loans with remaining balances 
between US $1,001 and US $5,000 account for 17% of the total number of loans. Loans with 
remaining balances in this size category make up the largest group of loans to men (48%). 
# 
1,180 
71 
388 
442 - 
62 
2,146 
Anlt, 
47,929.89 
148,128.73 
2,038,112.59 
7,757,708.87 
4,980,526.20 
14,972,406.28 
# 
I0 
82 
432 
523 
69 
1116 
% 
55 
3.4 
18.1 
- 20.6 
2.9 
100 
Yo 
0.3 
1 
13.6 
51.8 
33.3 
100 
'% 
0.9 
7.3 
38.7 
46.9 
6.2 
100 
O/o 
0 
0.9 
12.6 
48.9 
37.6 
100 
# 
6345.08 
165952.15 
2335128.01 
9092409.62 
6988106.76 
18587941.62 
# 
1,190 
156 
820 
965 
13 1 
3,262 
O/o 
36.5 
4.8 
25.1 
29.6 
4 
100 
Amt. 
54,274.97 
314,080.88 
4,373,240.60 
16,850.1 18.49 
11,968,632.96 
33,560,347.90 
The average remaining loan balance for all loans is US $725 for all loans: US$463 for women 
and US $1,620 for men. This 36% of per capita GDP for all loans: 23% for women and 81% 
for men. 
For individual credit union distributions, see Annex E. 
Scale of Outreach: Loans Granted 
Only 5 credit unions had data available on the number and volume of loans awarded in 1998. 
Of the sample project credit unions listed above, 4,812 loans were ganted in 1998, comprising 
a total volume of US$ 5,765,562.00. The total loans outstanding for all project credit unions 
in 1998 was US$ 205.599.978.00. 
I Loans Awarded 1998 In US$ I 
Credit Union 
Avance 
La Favorita 
Depth of Coverage 
I 
Since the current scope of this evaluation does not allow for measuring client wealth holdings, 
loan size will serve as a proxy for income level. USAID has designated loans with an average 
balance of less than $300 per borrower a working definition of poverty lending. Loans under 
this threshold are assumed to be reaching the poorest borrowers. The underlying assumption 
is that the smaller the loan, the poorer the set of people willing to go through the loan 
application process. 
Nunlber 
1,129 
1.052 
To identify credit union credit outreach to the lowest socioeconomic groups, the median is 
the most accurate measure of the distribution's central tendency, especially when the 
distribution is skewed as in the case of a mixed-outreach institution's data set. The mean value 
reflects a biased representation of higher-end borrowers. t' 
Nuevo Siglo 
Sihuatehuac~n 
Solidez Total 
TOTALS 
Of the sample ~roject credit unions, the average loan granted~during 1998 was 
US$ 1,416. The median loan size granted was significantly smaller at US$ 605. Hence, half of 
credit union clients in 1998 received loans less than US$ 605. 
Volume 
648,060 
562.757 
Then 1998 project mean as a percentage of Gross Domestic Product per capita (GDP/capita) is 
71%. The project median as a percentage of GDP/capita is 30%. 
4 12 
1,824 
598 
5,015 
Mean 
574 
673 
Median 
192 
47 1 
1,4 1 1,823 
2,615,362 
574,260 
5,8 12,262 
3,3 11 
1,560 
960 
1,415 
1,149 
632 
579 
604 
Total Number of Loans Granted by Range Total Volume of Loans Awarded by Range 
~1% 
The sample project credit unions granted 1,541 loans less than US$ 300, which represent 
35% of the total number of loans granted. Of this loan group, 22% (850) of the loans were 
below US$ 150. These small loans comprise 4% of the total volume of loans granted. 
Scope of Coverage: Market Diversificdtiotz '/ 
1 Credit union loan portfolios are not targeted toward one specific segment of the market (i.e., 
micro-enterprise). Credit unions attend a wide range of loan purposes. 
Credit unions respond to the financing needs of their members. Most micro-entrepreneurs' 
household and business finances are intertwined. Many micro-enterprises are family 
operations, and financing often responds to household needs for consumption smoothing and 
housing. 
The broad diversity of credit union loan portfolios is also one of the mechanisms used to 
minimize loan risk. Diversification spreads the potential loan risk among a wide range of 
economic activities (e.g., agriculture, housing, commerce, enterprise, etc.) 
Total Loans ~rantcd in 1998 by Purpose 
BI Business (self-employment in 
conunerce, production or senices) 
Consumer 
0 Housing 
0 Legal Services 
Emergency 
Approximately half of all loans awarded in 1998 (48%) served to finance activity in self￾employed commerce, production or services. The other major loan purpose was 
consumption, at 44% of all loans. / 
Gender Coverage: Loans to Women 1 
- 
1998 Loans Awarded by Gender 
WOMEN 
Loan Size 
$0- 150 
$15 1-300 
$301-500 
$501-750 
$751-1,000 
$1,001-1,500 
$1,501-5,000 
$5,001 + 
N/A 
TOTALS 
MEN 
# 
369 
272 
293 
263 
195 
303 
384 
79 
125 
2,283 
# 
500 
418 
430 
299 
205 
287 
393 
81 
119 
2,732 
YO 
# 
men 
16% 
12% 
13% 
12% 
9% 
13% 
17% 
3% 
5% 
100% 
O/O # 
women 
18Yo 
15% 
16% 
11% 
8% 
11% 
14% 
3% 
4% 
100% 
O/O # 
total 
10% 
8% 
9% 
6% 
4% 
6% 
8% 
2% 
2a/0 
% # 
total 
7% 
5% 
6% 
5% 
4% 
6% 
8% 
2% 
2% 
% 
volume 
men 
1% 
2% 
4% 
5% 
6% 
12% 
23% 
48% 
n/a 
100% 
volume 
26,859 
58,551 
119,111 
168,635 
179,046 
374,015 
708,443 
1,480,649 
0 
3,115,310 
volume 
38,631 
87,728 
165,968 
182,464 
173,708 
341,157 
981,149 
907,449 
0 -- - 
2,878,254 
YO 
volume 
total 
0% 
1% 
2% 
3% 
3% 
6% 
12% 
25% 
n/a 
% 
volume 
men 
1% 
3% 
6% 
6% 
6% 
12% 
34% 
32% 
n/a 
- 
YO 
volume 
total 
1% 
1% 
3% 
3% 
3% 
6% 
16% 
15% 
n/a 
Female clients of project credit unions hold 48% of the volume and 68% of the number of 
loans. 
The aforementioned microenterprise survey Encuestu Microetnpresarkll998 underscored the 
overrepresentation of women in the lower socioeconomic strata of the microenterprise sector. 
This result coincides with credit union female clients' high participation in small loans, which 
suggests a low-income client. Of all loans awarded to women, 33% were below US$ 300.00, 
compared to 28% of men. 
I 
The Encuestat resulting microenterprise profile further coincides with the project credit union 
client profile in that both report the majority of women having their primary occupation in 
self-employed commerce, production or services (see section 1I.A). Furthermore, 38% of women 
secured loans for activity in self-employed commerce, production or services (see annex D). 
Women reported a higher average loan of US$ 1,442, compared to 1,431 for men. More 
informatively, the average mean for women was also higher at US$ 701.00 compared to 
US$635 for men. Hence, women had a larger share of the number of smaller loans. 
The sample project distribution minimum value for women was US$ 24.00, compared to US$ 
35.00 for men. The maximum value for women was US$ 29,743.00, compared to US$ 
21,412.00. 
1 
Both male and female project credit union clients report a 72% project mean expressed as a 
percentage of GDP/capita. Female clients' median, expressed as a percentage of GDP/capita, 
was slightly higher at 35%, compared to 32% for men. 
1998 LOANS AWARDED TO WOMEN 
IN US$ 
1998 LOANS AWARDED TO 
MEN IN us$ 
Credit Union 
Avance 
Favorita 
Nuevo Siglo 
Sihuacoop 
Solidez Total 
Average 
Credit Union 
Avance 
Favorita 
Nuevo Siglo 
Sihuacoop 
Solidez Total 
A verage 
Mean 
543 
603 
3,529 
1,520 
1,016 
1,442 
Mean 
614 
788 
3,216 
1,611 
924 
1,431 
Median 
189 
442 
1,724 
597 
555 
701 
Median 
192 
537 
1,149 
672 
625 
63 5 
Max 
3,448 
1 1,009 
57,47 1 
65,939 
10,846 
29,743 
Min 
1 
1 
92 
3 
2 1 
24 
Max 
7,208 
9,587 
40,230 
45,5 17 
4,5 19 
21,412 
Min 
0 
13 
149 
6 
9 
35 
Number 
635 
72 7 
127 
1,007 
236 
546 
Number 
494 
, 325 
285 
8 17 
362 
457 
Volume 
344,072 
317,557 
469,862 
1,508,956 
237,812 
575,652 
Volume 
Y 303,988 
245,200 
941,961 
1,289,762 
334,399 
623,062 
FINANCIAL PERFORMANCE 
A major component of WOCCU's technical assistance in the CRECER-RFE project has 
focused on implementing the monitoring tool named PEARLS. PEARLS refers to a set of 
basic indicators in six key areas: Protection, Financial Structure, Earnings and Costs, 
Liquidity, Non-Productive Assets and Growth. It provides the credit union system with 
standards to measure their performance as financial intermediaries. 
Credit Union PEARLS 
INDICATOR 1 12/95 ) 12/96 1 12/97 1 12/98 1 9/99 
I I I I I 
PROTECTION (PROTECCION) 
< 12 Months 
I FINANCIAL STRUCTURE (ESTRUCTURA FINANCIERA) I 
Loans / Total Assets 
Liquid Instruments / Total Assets 
Financial Investments > 30 days / 
Total Assets 
Deposits / Total Assets 
84% 
2% 
5% 
30% 
External Credit / Total Assets 
Shares / Total Assets 
17% 
39% 
I 
Institutional Capital / Total Assets 5% 
EARNINGS AND COSTS (RENDIMIENTOS Y COSTOS) 
{eturn on Loans / Average Loans 1 19.6% 1 24.1% 1 27.3% 1 26.9% 1 26.1% 
teturns on Liquidity / Average 
;iquid Instruments 
ieturn on Financial Investments / 
Yverage Financial Investments 
Zost of Deposits/ Average 
3coosits & I I 
Gross Margin / Average Asscts 1 12.2% [ 14.1% 1 14.3% 1 13.9% 1 13.3Vo 
10.2% 
1.7% 
11.4% 
3ost of Shares / Average Shares 1 OO/o 
2ost of External Credit / Average 
External Credit 
0% 3.0% 5.4% 5.7% 
9.2% 
2.9% 
12.9% 
9.8O/0 
Operating and Administrative 
Expenses / Average Assets 
Provisions for Losses / Average 
Assets 
Net Income / Average Assets 
10.1% 
6.1% 
13.7% 
15.4% 
6.6% 
0.4% 
LIQUIDITY (LIQUIDEZ) 
5.2% 
Liquid Instruments - Itntnediatc 
Obligations / Deposits 
Liquidity Reserves / Deposits 
Cash & Non-earning Liquidity / 
Total Asscts 
Deposits in Caja Ccntral / Total 
Liquid I~lvest 
Delinquency / Total Loans 
Non-Productive Assets / Total 
Assets 
10.4% 
3.7% 
1 1.9% 
14.4% 
7.9% 
0.8% 
GROWTH (SENALES EXPANSIVAS) 
7.6% 
6.0% 
9.0% 
5.4% 
NON-PRODUCTIVE ASSETS (ACTIVOS IMPRODUCTIVOS) 
10% 
O"/o 
2% 
2% 
37% 
8% 
'I'otal Assets 
Loans 
Deposits 
External Credit 
Shares 
Institutional Capital 
Members 
I 
8.5"/0 
2.2% 
17.3% 
3.6% 
34% 
8 '10 
1 9Y0 
13% 
37% 
0% 
13%0 
12% 
10% 
18.2% 
7.7% 
2.6% 
20% 
OO/o 
1% 
16%0 
7.5% 
2.7% 
3.7% 
19Y0 
6'/0 
2% 
44% 
1 
23Yo 
8?40 
1% 
/ 
39% 
21% 
10% 
2 1 9'0 
15% 
54% 
- 18% 
7% 
4 1% 
10% 
3.1% 
26% 
9% 
1% 
45% 
16% 
11% 
27% 
19% 
5 0 O/O 
- 16% 
2%0 
6 1°/o 
26% 
1 5% 
10% 
20% 
16% 
26% 
3% 
6% 
27% 
36% 
A. PROTECTION (PROTECCION) 
Loan loss provisions are the first line of defense for protection of savings against losses from 
delinquency. The 13 credit unions have increased provisions for loan loss to 100 percent of 
loans delinquent more than 12 months. At 27%, the credit unions have not yet reached the 
standard of loan loss provisions for those loans delinquent less than 12 months. 
B. FINANCIAL STRUCTURE (ESTRUCTURA FINANCIERA) 
Loans have increased significantly in volume, from 149 million Colones to 225 million 
Colones during the life of the project. Yet measured as a percentage of total assets, loans have 
fallen from 84% in 1995 to 70% in 1999. This suggests simply that as credit unions have 
mobilized increasing savings, their lending activities have not grown as rapidly. As a result an 
increasing amount of the mobilized funds are invested in liquid investments, rising from 2% 
to 15% of assets by 1999. Liquid investments offer a much lower return of 8% compared to 
26% on loans. Therefore, credit unions need to focus attention upon increasing their lending 
activities or they will suffer decreasing profitability. 
The credit union source of funds has matured as credit unions have increasingly mobilized the 
more robust market-rate withdrawable deposits rather than depend on traditional forced￾savings shares, which are credit driven. Deposits are substituting shares rising from 35% of 
assets to 55% of assets as a source of funds. Shares show the reverse pattern falling from 39% 
of assets to 24% of assets. External credit shows a more accelerated &crease as a source of 
funds from 17% of assets to 6% of assets. At an average cost of 18% for external credit 
L compared to the cost of 9% for deposit savings, the decrease of dependence on external credit 
improves the profitability of the credit unions. 
Institutional capital (reserves and retained earnings) has risen from 5% to 7% of assets. The 
higher level continues to fall well short of the international standard of 10% of assets. Slower 
growth of institutional capital reflects (i) the difficulty of retained profits to keep up with 
rapidly growing assets; (ii) the slowness of credit unions to move to higher loan rates which 
will support capitalization; and (iii) the decreasing profitability of credit unions as their 
lending activities do not keep pace with savings growth. 
FINANCIAL STRUCTURE: LOANS / TOTAL ASSETS 
I I I I I 
C.F. UNION (ACACU) 91% 87% 72% 64% 62% I I I I I 
C.F. DINAMICA (ACCOVI) 9 1% 86% 8 1% 7 1 '10 73% 
C.F. UNIDAD (ACODJAR) 1 7701~ 1 72% 1 74% 1 7 6990 I I I I I 
C.F. PROGRESO (ACACYPAC) I 75% 76% 7 5 O/o 71% 66% 
C.F. NUEVO SIGLO 
(ACAYCCOMAC) 72% 66% 42% 5 5% 57% 
C.F. FAVORITA (ACOPACTO) 74% 66% 63% 66% 69% 
C.F. SOLIDEZ TOTAL 
IACECENTA) 66Yo 67% 66% 68% 65% 
C.F. EL ESFUERZO (ACACME) 83% 67% 66% 72% 68% 
I I I I I 
C.F. AVANCE (ACACESPSA) 75% 7 1 '1'0 69Yo 75% 74% , I 
C.F. UNICA (ACOCOMET) 54% 5 8 O/o 60% 58% 49Ok 
1 
La Union shows significant decrease in loans as a percent of assets from 91% to 62%, matched 
by its rapid increase of deposits from 48% to 69% of assets. Avance and Uno show light 
decreases in loans as a percent of assets and increases in deposits as a percent of assets. 
FINANCIAL STRUCTURE: DEPOSITS / TOTAL ASSETS 
3. UNION (ACACU) 4 8% 50% 60% 65% 69% I I I I I 
C.F. DINAMICA (ACCOVI) 50% 46% 54% 67% 6 8 O/o 
I 
C.F. UNIDAD (ACODJAR) 9% 1 4 O/o 24% 38% 46% 1 I I I I 
C.F. PROGRESO (ACACYPAC) I 32% 35% 42% 37% 3 2 '10 
C.F. P"'"" 
(AC A' 
C.F. FAVORITA (ACO 
C.F. SOLIDEZ TOTAL 
(ACECENTA) 9% 16% 16% 25% 3 1°/c 
C.F. EL ESFUERZO (ACACME) 11% 21% 25% 28% 3 6% 
C.F. PRINCIPAL 
(ACACSEMERSA) 16Yo 19% 30% 3 3 '10 38% 
C.F. SIHUATEHUACAN 
(SIHUACOOP) 15% 2 0 O/o 3 5 '10 42% 41% 
C.F. UNO (COOPUNO) 3 1% 33% 40% 4 6% 42OL 
C.F. AVANCE (ACACESPSA) 1 8% 1 13% 1 20% 1 19% 1 1691 
C.F. UNICA (ACOCOMET) 6O/0 1 18% 1 35% 1 39% 1 44OA 
Six credit unions including La Union, Dinimica, Nuevo Siglo, Solidez Total, Principal and 
Unica show large decreases in external credit financing of assets. Unidad and Sihuatehuacin 
show moderately decreasing trends. Five credit unions, including Progreso, La Favorita, El 
Esfuerzo, Avance and Uno, show little change. 
FINANCIAL STRUCTURE: EXTERNAL CREDIT / TOTAL ASSETS 
C.F. NUEVO SIGLO 
(ACAYCCOMACI 
Credit Union 
C.F. UNION (ACACU) 
C.F. DINAMICA (ACCOVI) 
C.F. UNIDAD (ACODJAR) 
C.F. PROGRESO (ACACYPAC) 
C.F. PAVORlTA (ACOPACTO) I 22% I 18% 
12/95 
14% 
2 O/o 
3 1 "/o 
39Yo 
12/96 I 
12% 
14% 
4 2 '10 
31% 
C.F. SOLIDEZ TOTAL 
(ACECENTA) 
C.F. EL ESFUERZO (ACACME) 
Principal, Sihuatehuacjn and Uno meet standards of 10°/o Lof assets in institutional capital 
while Avance and La Favorita meet minimum standards of 8%. Therefore, nine of the 
thirteen credit unions remain below international minimum standards. Capital growth has 
been slowed by rapid asset increase with deposit growth, by the need to provision for large 
amounts of historical delinquency and by the low level of profitability. The faster growing 
credit unions such as La Union, Dinarnica and Avance show slight increases to 6-7%, 
whereas Unidad shows a decreasing trend from 22% to 7%. 
C.F. PRINCIPAL 
(ACACSEMERSA) 
C.F. SIHUATEHUACAN 
(SIHUACOOP) 
C.F. UNO (COOPUNO) 
C.F. AVANCE (ACACESPSA) 
C.F. UNICA (ACOCOMET) 
22% 
22% 
15% 
18% 
2 2 O/o 
40% 
0% 
38% 
14% 
- 
13% 
33% 
0% 
3 6% 
2% 
( FINANCIAL STRUCTURE: INSTITUTIONAL CAPITAL / TOTAL ASSETS 
I 
C. EARNINGS AND COSTS (RENDIMIENTOS Y COSTOS) 
Credit union net income has fallen from 5.9% of assets in 1995 to 3.5% in June 1999. This 
reflects several changes in both rates of return and financial structure. Credit union 
profitability has been affected: 
1 
C.F. PRINCIPAL 
(ACACSEMERSA) 
C.F. SIHUATEHUACAN 
(SIHUACOOP) 
C.F. UNO (COOPUNO) 
C.F. AVANCE (ACACESPSA) 
C.F. UNICA (ACOCOMET) 
Positively as the average return on loans has increased from 21% in 1996 to 26% in 1999 
and negatively as the portion of assets earning as loans decreased from 84% to 71°/o, 
Positively as the cost of deposits has decreased from 11% to 9% and negatively as the share 
of deposits funding assets increased from 30% to 55%, 
Negatively by the increasing cost of external borrowings from 10% to 18% and positively 
as the portion of assets funded by external credit fell from 17% to 6%, 
Negatively by the decreasing returns on liquid investments from 10% to 8% and negatively 
as the portion of assets in the form of liquid investments increased from 2% to 15%, 
Negatively by the marginally increasing operating costs from 6.6% to 7.5% of assets, 
Negatively as the return which credit unions pay on shares has increased from 0% to 6%) 
Credit Union 
C.F. UNION (ACACU) 
C.F. DINAMICA (ACCOVI) 
C.F. UNIDAD (ACODJAR) 
C.F. PROGRESO (ACACYPAC) 
C.F. NUEVO SIGLO 
(ACAYCCOMAC) 
C.F. FAVORITA (ACOPACTO) 
C.F. SOLIDEZ TOTAL 
(ACECENTA) 
C.F. EL ESFUERZO (ACACME) 
5% 
5% 
6% 
4 '10 
4% 
4% 
9% 
6% 
4 O/o 
5O/o 
12/98 
5% 
6% 
9% 
7% 
3% 
7% 
5% 
3% 
9/99 
5% 
7% 
7% 
6% 
3 Oh 
8% 
6% 
4% 
12/95 
3 '10 
5% 
22% 
4% 
-5% 
6% 
5% 
4% 
6% 
7% 
10% 
5 '10 
4% 
12/96 
4% 
4% 
17% 
3% 
-2% 
6% 
6% 
3% 
10% 
1 1% 
10% 
6% 
6% 
12/97 
4 Oh 
4% 
13% 
4% 
1 O/O 
7% 
5 Oh 
4% 
11% 
12% 
10% 
8% 
6% 
Positively by the increased amount of self owned funds, or institutional capital, generating 
a return for the credit union. 
Note that the negative impact of increasing volume of deposit savings is a positive indication 
of maturity, competitiveness and sustainability. The negative impact of increased cost of 
shares is also an indication of maturity and competitiveness. Credit unions are approaching 
market rates, paying members a return on their shares where they received no return before. 
There is little change in gross financial margin from 125 in 1995 to 13% in 1999. Thus credit 
unions have moved to a more competitive equilibrium of financial intermediation. 
I 
The fall in net income ratios reflects temporary costs to make credit unions safer places for 
members to place their savings. The largest negative impact upon profitability has been the 
improved discipline of provisioning for long time uncollectible loans, rising from 0.4% to 
2.7% of assets. This cost will fall again as historical losses are charged off and loan screening 
and risk analysis improves. It is expected that profitability will improve as historical losses are 
cleaned up and provisions fall as well as credit unions absorb increasing liquidity into higher 
levels of lending . 
EARNINGS AND COSTS: RETURN ON LOANS / AVERAGE LOANS 
In all but one case, credit union loan rates have increased since 1995 and 1996. Credit unions 
traditionally charged lower-than-market rates on loans. Currently, credit union management 
has committed to market rates. The loan rates now offerg tend to be much closer to the 
market rate or higher than those charged by other institutions. 
(:.Iz. LJNION (ACACU) 
C.1:. DINAMICA (ACCOVI) 
C F. IJNIVALI (ACODJAR) 
C I:. I'IZOGKI~SO (ACACYPAC) 
C.F. NUEVO SlGLO (ACAYCCOMAC) 
C.F. FAVORITA (ACOPACTO) 
C.F. SOI.II)EZ TOTAL (ACECENTA) 
C 1:. EL ESFUEKZO (ACACME) 
C.F. PRINCIPAL (ACACSEMERSA) 
C.F. S1I IUATEI IUACAN (SII IUACOOI') 
C.F. UNO (COOPUNO) 
C.F. AVANCE (ACACESPSA) 
I C.F. UNICA (ACOCOMET') 
12/96 
2 1% 
25% 
26% 
27O/o 
2 6% 
25% 
25% 
25% 
25% 
27O/o 
2 4 '10 
27% 
27% 
12/95 
2OYo 
229'0 
22O/o 
28O/o 
23% 
24% 
2 4'1/0 
20°/0 
23% 
23% 
23% 
26% 
27% 
12/97 
2 9 '10 
25% 
27% 
30% 
2 3 '10 
3 1% 
2 6%0 
3 1% 
27% 
3 2 O/o 
24% 
30% 
29% 
12/98 
25% 
27% 
26% 
3 5% 
2 1% 
50% 
279'0 
27% 
26% 
29Yo 
25% 
30% 
33% 
9/99 1 
26% 
23% 
2 6% 
3 1% 
27% 
40% 
27% 
26% 
26% 
28% 
27% 
28% 
28% 
Nominal Loan Interest Rates 
August 1999 
Bank / Financiers Average Loan Interest MicroEnterprise 
Rate Loan Rate 
CALPIA 36% 36% 
Banco Hipotecario 15.7% 22Ok 
Banco Comercio 15.4% 24% 
Banco Cuscatlbn I I 22% 
Banco de Fomento 15.7% 3 6OA 
Citibank I 25.54 
The return on deposits has decreased marginally over time. Falling market rates have reflected 
greater system liquidity, improved investor confidence and decreasing'inflation. Although 
credit union savings interest rates tend to fall slower than tbe market changes, credit unions 
have begun to compete for savings not only on the basis of higher rates but also on the basis of 
institutional image, range of services and convenience of services. This has led to a decrease in 
the premium which credit unions must pay above other formal financial institutions on 
savings. 
1 
Credit union passbook savings rates compare favorably to those of local banks. Credit unions 
have increased term deposit interest rates to levels, which provide a positive real return to 
savers. 
' 
EARNINGS AND COSTS: COST OF DEPOSITS / TOTAL DEPOSITS 
9/99 
10% 
8% 
7% 
8% 
8% 
12% 
11% 
11% 
8% 
13% 
9% 
8 O/o 
8% 
Credit Union 
C.F. UNION (ACACU) 
C.F. DINAMICA (ACCOVI) 
C.F. UNIDAD (ACODJAII) 
C.F. PROGRESO (ACACYPAC) 
C.F. NUEVO SIGLO 
(ACAYCCOMAC) 
C.F. FAVORITA (ACOPACTO) 
C.F. SOLIDEZ TOTAL 
(ACECENTA) 
C.F. EL ESFUERZO (ACACME) 
C.F. PRINCIPAL 
(ACACSEMERSA) 
C.F. SIHUATEHUACAN 
(SIHUACOOP) 
C.F. UNO (COOPUNO) 
C.F. AVANCE (ACACESPSA) 
C.F. UNICA (ACOCOMET) 
12/95 
14% 
1 1 O/o 
1 1% 
13% 
12% 
8 O/o 
11% 
11% 
12% 
14% 
16% 
10% 
7% 
12/96 
13% 
13% 
10% 
13% 
11% 
5% 
1 1 O/o 
8% 
12% 
14% 
16% 
9 '10 
1 1% 
12/97 
17% 
12% 
14% 
12% 
1 I O/o 
9% 
8% 
10% 
10% 
14% 
15% 
6% 
12% 
12/98 
1 1 O/o 
13% 
9% 
12% 
8% 
13% 
15% 
14% 
10% 
14% 
14% 
7% 
10% 
Savings Interest Rates 
Se~tember 1999 
X. UNION 
ACACU) 3% 4% 
Z.F. NUEVO SIGLO 
'ACAYCCOMAC) 1 5.7596 1 GO/O 
b 
Z.F. FAVORITA 
'ACOPACTO'I 6% 10% 
Z.F. SOLIDEZ 
rOTAL 
IACECENTA) 
C.F. EL ESFUERZO 
(ACACME) 
C.F. PRINCIPAL 
(ACACSEMERSA) 5% 7% 
C.F. 
SIHUATEHUACAN 
SIHUACOOP 
C.F. UNO 
fCOOPUN0) 
C.F. AVANCE 
(ACACESPSAI 1 5.75% 1 8% 10% 11% 
8.75% 9.25% 
10.07% 10.48% 
30 Day 90 Day 
Term Term 
Deposit Deposit 
8 O/o 8% 
8% 8.75 
C.F. UNICA 
(ACOCOMET) 5% 4% 
11.27% 
180 -Day 
Term 
Deposit 
8.25% 
Average I 5.64%1 7.41% 
Banks 
Banco Agricola 
Banco Fomento 4 Agropecuario 
Banco Salvadoreiio 3 '10 
Banco de Comersio 3 '/a 
Average 3h6 
Two credit unions, Progreso and El Esfuerzo, report zero dividends on shares while a third, 
Unica, reports only a dividend of one percent. Nuevo Siglo, Dinamica and Uno lead the 
credit unions in paying rates of return which compete with market deposit rates. 
D. LIQUIDITY 
EARNINGS AND COSTS: COST OF SHARES / TOTAL SHARES 
Liquidity at project credit unions has increased from a low 10% of deposits in 1995 to 
an excessive 26% of deposits in 1999. Liquidity reserves, set by standards to reach 10% 
of deposits have risen from 0% in 1995 to 9% in 1999. Credit unions show an 
increasing deposit of their liquidity from 2% in 1995 to 45% in 1999 in the Caja 
Central of the federation. The high concentration of credit union liquidity in the 
federation Caja Central imposes a high' concentration risk of the system liquidity. 
C.F. UNION (ACACU) 
C.F. DINAMICA (ACCOVI) 
C.F. UNIDAD (ACODJAR) 
C.F. PROGRESO (ACACYPAC) 
C.F. NUEVO SlGLO (ACAYCCOMAC) 
C.F. FAVORITA (ACOPACTO) 
C.F. SOLIDEZ TOTAL (ACECENTA) 
C.F. EL ESFUERZO (ACACME) 
C.F. PRINCIPAL (ACACSEMERSA) 
C.F. SIHUATEHUACAN (SIHUACOOP) 
C.F. UNO (COOPUNO) 
C.F. AVANCE (ACACESPSA) 
C.F. UNICA (ACOCOME'I') 
12/95 
0% 
OO/o 
O"/o 
o"/o 
OYo 
oO/o 
0% 
0% 
0% 
0% 
0% 
0% 
o"/o 
12/98 
6% 
8% 
0% 
0% 
6% 
5% 
0% 
0% 
4% 
8% 
8% 
/ 
0% 
1% 
12/96 
0% 
0% 
0% 
0% 
0% 
0% 
0% 
0% 
0% 
0% 
OO/o 
0% 
0% 
9/99 
5% 
8% 
6% 
0% 
9% 
5% 
4% 
0% 
5% 
7% 
8% 
4% 
1 % 
12/97 
0% 
6% 
oO/o 
OYo 
0% 
0% 
0% 
0% 
0% 
8% 
7% 
0% 
L 
0% 
LIQUIDITY: LIQUIDITY / DEPOSITS 
/ 
Unidad, Nuevo Siglo, Solidez Total, Principal and Sihuatehuach exhibit deposits on the Caja 
Central in excess of 70% of their liquidity. The same credit unions exhibit high levels of 
liquid investments relative to total assets and low levels of net income. Progreso, La Favorita 
and El Esfuerzo display deposits on the Caja Central in excess of 60% of their liquidity. 
- 
- 
Credit Union 
C.F. UNION (ACACU) 
C.F. DINAMICA (ACCOVI) 
C.F. UNIDAD (ACODJAR) 
C.F. PROGRESO (ACACYPAC) 
C.F. NUEVO SIGLO 
(ACAYCCOMAC) 
C.F. FAVORITA (ACOPACTO) 
C.F. SOLDEZ TOTAL 
(ACECENTA) 
C.F. EL ESFUERZO (ACACME) 
C.F. PRINCIPAL 
(ACACSEMERSA) 
C.F. SIHUATEHUACAN 
(SIHUACOOP) 
C.F. UNO (COOPUNO) I 
12/95 
3% 
7% 
60% 
7% 
35% 
37% 
6 1 O/o 
10% 
-4% 
30% 
19% 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
1 
12/96 
9% 
9% 
6 5 O/o 
2% 
26% 
55% 
22% 
19% 
2 1 O/o 
29% 
53% 
12/98 
23% 
29% 
23% 
3 0 '10 
3 1% 
2 6% 
8% 
7% 
7% 
13% 
19% 
12/97 
22% 
20% 
24% 
12Yo 
3 1% 
60% 
13% 
13% 
15% 
9% 
10% 
9/99 
29% 
23% 
28% 
46% 
28% 
28% 
2 8 '10 
9% 
19% 
23% 
34% 
C.F. AVANCE (ACACESPSA) 
C.F. UNICA (ACOCOMET) 
1 1% 
8 7% 
50% 
2 5% 
55% 
3 4 '10 
- 6 '10 
2 9 O/o 
8% 
4 1% 
1 
E. NONEARNING ASSETS 
' 
The project has focussed ~echnical assistance and training on improved credit 
screening, loan risk analysis and collections. Delinquency appropriately measured as 
outstanding loan balance of loans delinquent more that 30 days, decreased from 37% in 
1995 to 15% in 1999. This still falls short of minimum international credit union 
standards of 10%. Non-productive or non-earning assets have risen from goh to 10% of 
assets, reflecting increased credit union investments in computer information systems 
and improved physical infrastructure. 
2 
LIQUIDITY: DEPOSITS IN THE CAJA CENTRAL / TOTAL LIQUIDITY 
Credit Union 
C.F. UNION (ACACU) 
C.F. DINAMICA (ACCOVI) 
C.F. UNIDAD (ACODJAR) 
C.F. PROGRESO (ACACYPAC) 
C.F. NUEVO SIGLO 
(ACAYCCOMAC) 
C.F. FAVORITA (ACOPACTO) 
C.F. SOLIDEZ TOTAL 
(ACECENTA) 
C.F. EL ESFUERZO (ACACME) 
C.F. PRINCIPAL 
(ACACSEMERSA) 
C.F. SIHUATEHUACAN 
(SIHUACOOP) 
C.F. UNO (COOPUNO) 
C.F. AVANCE (ACACESPSA) 
C.F. UNICA (ACOCOMET) 
12/98 
4 2 O/o 
31% 
65% 
59% 
62% 
60% 
69% 
74% 
4 1% 
5 1 O/o 
25% 
4 5 '10 
2 8 O/o 
9/99 
44% 
35% 
79% 
68% 
7 2 O/o 
62% 
8 1 O/o 
699'0 
70% 
77% 
2 1% 
5 0 '10 
27% 
12/95 
6% 
0% 
7% 
0% 
0% 
6% 
O0/o 
2 O/o 
OO/o 
9% 
0% 
0% 
0% 
12/96 
3 O/o 
0% 
4 '10 
11% 
2 8 '10 
7% 
3 '10 
6 4 O/o 
71% 
60% 
0% 
0% 
0% 
12/97 
57% 
34% 
4 7% 
62% 
4 9 '10 
53% 
56% 
67% 
45% 
66% 
1% 
45% 
1 9 '10 
All credit unions show significantly decreasing delinquency trends, most decreasing 
from levels between 40-55% to 18-13 %. Only Unidad, Principal and Sihuatehuacin 
meet international minimum standards. Still, delinquency rates have fallen by half to a 
third within a three-year period. 
NONEARNING ASSETS: 
DELINQUENCY 
Zredit Union 
Z.F. UNION (ACACU) 
Z.F. DINAMICA (ACCOVI) 
C.F. UNIDAD (ACODJAR) 
C.F. PROGRESO (ACACYPAC) 
C.F. NUEVO SIGLO 
(ACAYCCOMAC) 
C.F. FAVORITA (ACOPACTO) 
C.F. SOLIDEZ TOTAL 
(ACECENTA) 
C.F. EL ESFUERZO (ACACME) 
C.F. PRINCIPAL 
(ACACSEMERSA) 
C.F. SIHUATEHUACAN 
(SIHUACOOP) 
C.F. UNO (COOPUNO) 
C.F. AVANCE (ACACESPSA) 
C.F. UNICA (ACOCOMET) 
12/98 
13% 
19% 
20% 
2 1% 
27% 
46% 
20% 
16% 
12% 
2 2 O10 
1 OO/o 
1 4 '10 
11% 
(30 DAYS) 
12/95 
3 6% 
28% 
1 1 O/o 
7 6 '10 
8 '10 
9% 
8% 
5% 
3 3 '10 
19%0 
2Yo 
4 2 '10 
9/99 
18% 
13% 
8% 
30% 
35% 
3 1% 
13% 
15% 
10% 
8% 
12% 
13% 
16% 
/ LOAN 
12/96 
40% 
29% 
42% 
13% 
49% 
50% 
50% 
47% 
28% 
42% 
25% 
8% 
38% 
PORTFOLIO 
12/97 
20% 
14% 
24% 
25% 
28% 
37% 
3 0 '10 
28% 
2 4 '10 
34% 
18'/0 
10% 
4 5 '10 
NONEARNING ASSETS: NONEARNING ASSETS / TOTAL ASSETS 
:redit Union 12/95 12/96 
Z.F. UNION (ACACU) 6% 5% 
3. DINAMICA (ACCOVI) 7% 7 O/o 
C.F. UNIDAD (ACODJAR) 15% 14% 
C.F. I'ROGRESO (ACACYI'AC) 1 Oo/o 12% 
C.F. NUEVO SIGLO 
(ACAYCCOMAC) 15% 6% 
- 
- 
- 
- 
- 
Non-earning assets display marginally steady trends at post credit unions. La Union 
show significant increase with the expansion of physical facilities while Sihuatehuacin 
displays significant decrease with divestment of nonproductive assets. Unidad, La 
Favorita and Solidez Total show moderate decreases in non-earning assets as they have 
grown rapidly with deposit mobilization. 
12/98 
18% 
8 O/o 
12% 
8 O/o 
10% 
12/97 
12% 
8% 
14O/o 
10% 
8% 
C.F. SOLIDEZ TOTAL 
(ACECENTA) 2 6% 24% 
C.F. EL ESFUERZO (ACACME) 6% 19% 
C.F. PRINCIPAL 
(ACACSEMERSA) 8 O/o 9% 
C.F. SIHUATEHUACAN 
(SIHUACOOP) 33% 42% 
C.F. UNO (COOPUNO) 4 Oh 3% 
C.F. AVANCE (ACACESPSA) 12% 10% 
C.F. UNICA (ACOCOMET) 17% 1 1 O/o 
F. GROWTH (SENALES EXPANSIVAS) 
9/99 
16% 
8% 
1 1 O10 
11% 
8% 
In 1996, the growth of outstanding loans was 12%. During 1997, as credit unions revised their 
pricing and policies and as non-recoverable loans were written off, loan volume grew 15%. 
Loans outstanding then grew 20% in 1998 and 13% through September 1999. In real terms, 
loan growth was 2% and 10% in 1996 and1997, 17% in 1998 and 12% in 1998. 
25% 
20% 
12% 
34% 
4% 
11% 
12O/o 
19% 
16% 
10% 
22% 
4 '10 
10% 
13% 
19% 
17% - 
9% 
8% 
5 '10 
12% 
14% 
13 Credit Unions Loans Outstanding: Growth 
To launch the new image of the marketing campaign, the project assisted the credit unions in 
the development of a new standardized image of CUs through common logos, paint and sign 
color schemes, internal and external appearances, and all papers and customer forms. 
Assets $ 
Nominal Growth 
Real Growth 
Infrastructure improvements include painting and minor repairs, billboards, promotional 
devices, internal remodeling to upgrade offices and reception areas. CRECER made small 
investments to remodel or purchase materials to improve the credit unions' physical 
infrastructure, and enhance their image, security and operational capabilities. Assistance to 
the credit unions was povided on the condition chat they comply with the improved financial 
management discipline requirements. ,' 
Assets 
The project assisted credit unions in El Salvador to offer idproved deposit savings, which are 
withdrawable by members, and receive a market rate of return. Savings are "mobilized" with 
competitive, positive real rates and a sound institutional image. As credit unions generated 
sufficient internal savings to meet loan demands, liquidity shortage and credit rationing ended. 
The credit unions moved from their traditional position of a shortage of loanable funds to one 
of excess liquidity. They were then able to both increase the number of small loans made and 
lend larger amounts for a broader range of activities. 
1998 
287.706.454 
$18,171,369 
Project participant credit unions show nominal savings growth 37% in 1996, growth of 54% 
and then 50% in 1997 and 1998 in nominal terms. Through the first nine months of 1999, 
savings had grown by 20%. Real savings deposit growth grew 24% in 1996, 47Oh in 1997,46% 
in 1998 and 18% through September, 1999. 
1995 
158.090.909 
1999 
330.688.719 
Meanwhile shares grew 13% in 1996,7% in 1997 and then 2% in 1998. 
$2 1,63 1,08 1 
19% 
8% 
1996 
188.190.406 
1997 
226.925.698 
$126,083~4 14 
21% 
15% 
$33,069,707 
27% 
24% 
$38,610,477 
17% 
15% 
Inflation I 1 1.4%1 7.40/0] 1.99%1 4.180/01 I.~~/O] 
Exchange 
CPI 
During 1995, before the project was underway in the credit unions, the credit unions held 
US$5.52 million in savings deposits. While the project was underway, the credit unions 
increased savings to US$ 20.79 million by September of 1999, a net gain of US$15.27 million. 
8.7 
100 
8.7 
109.8 
8.f 
114.7 
8.7 
117.6 
8.7 
119 
VI. COMPARATIVE ANALYSIS 
A. PROJECT VS NON-PROJECT CREDIT UNIONS 
The thirteen project participant credit union financial indicators are compared with the 
indicators of another thirteen credit unions of the FEDECACES system. Comparison 
indicates that the non-project credit unions have made marginal progress in adequate 
provision for loan losses. Financial structure evolution reveals no changes in loans to assets. A 
marginal increase in liquidity results from a shift of deposits to assets from 16% in 1995 to 1 
28% in 1999 (compared to 55% in 1999 for participant credit unions) and a decrease of shares 
from 44% to 33% in 1999 (compared to 24% in 1999 for participant credit unions). Since 
savings are more volatile relative to shares, there is a greater need for liquidity External capital 
remains the same from 1995 to 1797 at 29% of assets. With the credit union growth, 
institutional capital has fallen to 2% of assets. 
Cost of deposits have risen marginally from 11 to 13% while the return on shares in 
participant credit unions has fallen to 9% for reasons indicated above. The return on shares 
remains at zero for non-project credit unions while it has risen to 6% for project participant 
credit unions. Non project credit unions' net income has risen form 2% to 3%. 
I 13 CREDIT UNION PEARLS (PERLAS) I 
PROTECTION (PROTECCIO~) 
INDICATOR 
FINANCIAL STRUCTURE (ESTRUCTURA FINANCIERA) 
13 PROJECT CUS 
12/96 1 9/99 
Provisions / Loans Delinquent 
> 12 months 
Net Provisions / Loans Delinquent 
< 12 Months 
13 CUS OUTSIDE 
PROJECT 
12/96 ' 1 6/99 
91% 
-1.9% 
Loans / Total Assets 
Liquid Ins~ruments / Total Assets 
Financial Investments > 30 days / 
Total Asscts 
I I I I 
External Credit / Total Assets 1 15% 6% 29% 29% 
100% 
26.8% 
79% 
7% 
I 
I I I I 
Shares / Total Assets I 37% 1 249 61 44% 1 33% 
5% 
Deposits / Total Assets I 35% 1 55% 
0% 
0% 
70Y0 
1 5% 
16% 2 8 O/O 
53% 
-20% 
4% 
I I I I 
67% 
2 O/o 
67% 
4'10 
11% 
Institutiorial Capital / Total Assets I So? 
9% 
7'10 3% 2 O/O 
CARNINGS AND COSTS (RENDIMIENTOS Y COSTOS) 
Leturn on Loans / Average Loans 24.1% 26.1% 2 1 O/o 24% 
Leturns on Liquidity / Average 9.2% 7.6% 5% 9% ~ iquid Instruments 
tturn on Financial Investnlents / 2.9% 6.0% 3% 6% iverage Financial Investments 
Iost of Deposits/ Average 12.9% 9.0% 11% lcposits 13% 
Zost of Shares / Average Shares 0% 5.7% 0% 0% 
2ost of External Credit / Average 
3xternal Credit 15.4% 18.2% 1270 16% 
2ross Margin / Average Assets 14.1% 13.3% 14% 14% 
3perating and Adn~inistrative 7.90/0 7.5% 9 '10 9 Oh Zxyenses / Average Assets 
Provisions for Losses / Average 0.8% 2.7% 0% 2% Assets 
Net Inconle / Average Assets 5.4'/0 3.1% 2 O/O 3% 
LIQUIDITY (LIQUIDEZ) 
Liquid Instruments - Immediate 
Obligations / Deposits 20% 26% 18% 12% 
Liquidity Reserves / Deposits 0% 9% 0% 3% 
Cash & Non-earning Liquidity / 1 O/o 1 O/o 2% 1% Total Assets / 
Deposits in Caja Central / Total 
Liquid Invest 16% 4 5O/& 2 5 O/o 4 8% 
NON-PRODUCTIVE ASSETS (ACTIVOS IMPRODUCTIVOS) 
Delinquency / Total Loans 3 4 O/O 15% 8 '10 15% 
Non-Productive Assets / Total 
Assets 8 '10 10% 13% 15% 
GROWTH (SENALES EXPANSIVAS) 
Total Assets 19% 20% 15% 
Loans 13% 16% 17% 
Deposits 37% 26% 3 4 '10 
External Credit 0010 3 '10 -2% 
Shares 1 ~O/O 6% 17% 
Institutional Capital 12% 2 7 '10 22% 
Non project credit unions include ACACCCI, ACACEMMA, ACACES, ACACESPRO, 
ACACI, ACACRECOSC, ACACTCID, ACOFINGES, ACOPACC, ACOPUS, CO￾ANDES, CODEZA, CODOSAL. 
Whereas delinquency has fallen from 34% to 15O% for project credit unions, delinquency 
among non-project credit unions has risen form 8% to 15% from 1996 to 1999. Non 
productive assets have increased marginally form 13 to 15 % of assets. 
This suggests some overlap of deposit mobilization thoughout the FEDECACES system, with 
much of the change occurring during the last two years. However, the non-project credit 
unions do not exhibit the adoption of the financial disciplines of capitalization, provisions and , delinquency control to protect those savings. 
B. FORMAL SECTOR MICROFINANCE INTERMEDIARIES 
'rhe Micro Bankinn Bulletin, (MBB) published by Calrneadow, is a semi-annual bulletin, 
which publishes a series of financial indicators for organizations providing financial services 
for the poor. In this section, we calculate the MBB financial ratios for the project credit 
unions in order to compare their performance with that of other micro-finance institutions in 
El Salvador using the same measures. 
Individual and consolidated credit union financial information is compared to that of other 
formal micro-finance institutions in El Salvador. These include the financiera CALPIA, the 
Cajas de Credito system, FEDECREDITO (where data is available) and four banks which 
have expanded in micro-finance lending: Banco Agricola, Banco de Fpmento Agropecuario, 
Banco Salvadoreiio and Banco de Comercio. The 13 credit union assets total 330 million 
Colones and CALPIA assets total 229 million Colones whik the banks range from 1.7 to 13.7 
billion Colones in assets. CALPIA operates 12 branch offices with 208 staff, while the 13 
credit unions have 6 branches and operate 18 points of service with 286 staff. Banks operate 
between 48 and 62 branches. 
Credit union institutional capital (reserves and retained earnings) as a percent of total assets 
averages 7.3% with a low of 2.6% at Nucvo Siglo and a high of 12.1°/0 at Sihuatehuacin. Bank 
institutional capital ranges between 3.60/0 and 3.9%, except for the state owned Banco de 
Fomento Agropecuario, which has -5.9% institutional capital. Therefore, although nine of the 
13 credit unions do not yet meet minimum credit union standards for capital, all but two are 
better capitalized than the four banks reviewed. CALPIA has a strong institutional capital of 
1 1. l0/0. 
I INSTITUTIONAL CHARACTERISTICS 1 1 I I INST. I MARKET 
I OUTREACH INDICATORS I 
INSTITUTION (Sept 1999) 
13 CUs CONSOLIDATED 
C.F. UNION (ACACU) 
C.F. DINAMICA (ACCOVI) 
CAJAS DE CREDITO: 
FEDECREDITO 
C.F. NUEVO SIGLO 
(ACAYCCOMAC) 
C.F. FAVORITA (ACOPACTO) 
C.F. SOLIDEZ TOTAL 
(ACECENTA) 
BANCO AGRICOLA 1-A NA ,- NA 8,798,786,OOC 
BANCO FOMENT0 
AGROPECUARIO NA NA NA 1,358,331,000 
AVERAGE 
LOAN 
BALANCE 
5,151 
9,434 
11,175 
706 
4,833 
The 13 credit unions granted 24,791 loans in 1998. CALPLA granted 29,101 loans in 1998 and 
29,061 loans in 1999, of which 17,437 were to women. 
26,480 
5,718 
6,339 
Outstanding Loans, measured as a percent of per capita Gross Domestic Product, for the 
credit unions averages 55%. Unidad (small and liquidity constrained) and Principal (medium 
size and relatively liquid) are characterized by small loans averaging 8% and 15% of per capita 
GNP. Nuevo Siglo, a medium credit union with a high degree of portfolio concentration in a 
few large loans, has a resulting high ratio of 154% The rest of the credit unions range between 
33% and 59%. CALPIA's loans as a percent of per capita GDP was 37% in 1998 and 40% in 
1999. 
LOAN 
AS O/O 
GDP 
55% 
llOO/o 
130% 
8% 
56% 
154% 
3 3 O/o 
37% 
NUMBER 
ACTIVE 
BORROWERS 
45,128 
4,147 
6,118 
7,776 
1,234 
- 
TOTAL 
LOAN 
PORTFOLIO 
232,455,343 
39,121,425 
68,366,18 1 
5,489,317 
5.963.957 
39 1 
852 
758 
10,353,769 
4,872,058 
4,805,135 
OVERALL FINANCIAL PERFORMANCE 
UNADJUSTED ( RETURN I JDJUSTED 
IN ASSETS 
2.2% 
FINANCIAL 
SELF 7 SELF 1 
SUFFICIENCY 
C.F. UNION 
(ACACU) 
C.F. DINAMICA 
(ACCOVI) 3.08% 
0.8 l0/0 
C.F. PROGRESO 
(ACACYPAC) 8.55% 
C.F. NUEVO SIGLO 3.640h (ACAYCCOMAC) 
(ACOPACTO) 3.3470 
C.F. SOLIDEZ 
I TOTAL 
(ACECENTA) 1 *.040/~ 
I C.F. PRINCIPAL 
(ACACSEMERSAI 1 3.86O/0 
E. AVANCE I 
. UNICA 0.49% 
GRICOLA 
-5.84% 
GROPECUARIO 
ANCO 1 0.43% 
Credit unions continue to pay below market returns on shares. This remains the significant 
internal subsidy of Salvador credit union operations. When we apply the implicit cost of 
deposit interest rates to shares (i.e. if the credit union paid the same return on shares that it 
pays on deposits) the return to assets (net operating income to average total assets) fails from 
3.0% to 2.2%. The adjusted return on assets falls for all credit unions, yet very little for Uno 
which pays a competitive return on shares. Three credit unions reveal negative returns on 
assets when adjusted for the implicit cost of shares, Solidez Total, El Esfuerzo and Unica. In 
these the adjustnlent reflects the double effect of low returns on shares and high dependency 
of the credit unions' financial structure on shares. 
I 
In comparison to the credit union average unadjusted return of 3.0% on assets, CALPIA 
produces a 4.6 return on assets in 1999 and banks range between 0.43% and 0.76%, except for 
Banco de Fomento Agropecuario at -5.S0/0. 
Asset Utilization (operating income over average assets) in the credit unions is approximately 
half, at 12.3'%, of that of CALPIA at 26.5% Only La Favorita approaches that of CALPIA at 
23%, followed by Avance at 18.8%. Banks are again only half of that of credit unions, ranging 
4% to 5%. The portfolio yield of credit unions is 26% compared to 34% of CALPIA. 
Therefore part but not all of the difference in asset utilization results from the lower credit 
union loan interest rates. However, a large portion of the difference results from the 
significant amounts of credit union liquidity invested in low return liquid investments. 
OPERATING EXPENSES AS PERCENTAGE OF TOTAL ASSETS 
1 ADJUSTED 1 INTEREST 1 LOAN LOSS 1 STAFF I OTHER 
NSTITUTION (sepl 1999) OPERATIN EXPENSE/ PROVISION / EXPENSE l ADMlN 
G AVG AVG AVG EXPENSE / 
EXPENSE / ASSETS ASSETS ASSETS AVG ASSETS 
AVG ASSETS 
13 CUs CONSOLIDATED 9.9% 8 .OO/o 2.7% 3.7% 3.6% 
C.F. DINAMICA 
(ACCOVI) 8.5% 8.5% 2.5% 2.7% 5.1% 
C.F. UNIDAD 
(ACODJAR) 10.5'/0 8.0% 3.0% 3.9% 3.5% 
C.F. I'ROGRESO 
(ACACYPAC) 1 5.7% 8.4% 6.7% 4.0% 2.9% 
C.F. NUEVO SIGLO 
(ACAYCCOMAC) 7.4% 6.6% 2.8% 3.3% 1.3% I 
C.F. FAVORITA 
(ACOPACTO) 19.6% 8.7% 4.9% 7.8% 6.9% 
C.F. SOLIDEZ TOTAL 
(ACECENTA) 10.4% 7.5% 1.1% 4.7% 4.7% 
C.F. EL ESFUERZO C 
(ACACME) 12.8% 8.7% 1.p 6.3% 5.2% 
C.F. PRINCIPAL 
(ACACSEMERSA) 10.3% 6.8% 0.3% 5.2% 4.9% 
C.F. SIHUATEHUACAN 
(SIHUACOOPI 10.9% 4.4% 3.1% 3.7% I 
C.F. UNO (COOPUNO) 9.2% 6.9% 5.3% 3.4% 3.3% 
C.F. AVANCE 
(AC ACESPS A) 16.2% 10.0% 0.7% 7.3% 8.2% 
C.F. UNICA I A ~A~AI RI--m 13.3% 4.3% 1.2% 6.2% 5.9% 
Credit unions demonstrate operating expenses as a percent of assets (9.9%) which are half as 
much as those of CALPIA (17.5%). Three credit unions do have operating expenses as high as 
CALPIA: Progreso at 15.7%, La Favorita at 19.6% and Avance at 16.2%. Interest expenses for 
credit unions are slightly lower from credit unions (at 8.0%) mobilizing savings, than 
CALPIA (at 9.5%) accessing capital markets. 
Staff expenses over average assets for credit unions (at 3.7%) are also approximately half of that 
of CALPIA (at 9.9%). La Favorita, El Esfuerzo, Avance and Unica hold up the high end 
among credit unions with ratios of 6% and 7%. As credit unions expand lending operations, 
tighten delinquency control exercises and expand the range of credit products, both the I 
operating expense and the staff expense as a percent of assets will increase. Such increases in 
operating expenses will be more than offset if credit unions reprogram their liquidity into 
these expanded credit operations. 
Other adnlinistrative expenses as a percent of assets in the 13 credit unions (at 3.6%) are also 
approximately half of those of CALPIA (at 6.9%). 
PORTFOLIO MANAGEMENT 
I 1 IPORTFOLIOIAVG LOAN /I 1 PHYSICAL 
~C.F. UNIDAD (ACODJAR) 9.9~01 5.20/01 7.80/01 15 1 .o0/o1 1731 
1C.F. NUEVO SIGLO 1 8.2%1 38.50/01 1 54.C16/01 232.0A 1341 
C.F. FAVORITA (ACOPACTO) 1 22.04 1 1.70/01 3 3. 7V01 1 33.2~01 258.04 
C.F. SOLIDEZ TOTAL 
C.F. EL ESFUERZO (ACACME) 
C.F. PRINCIPAL 
AGROPECUARIO 
BANCO SALVADORENO 
BANCO DE COMERCIO 
14.2% 
15.1% 
13.2% 
CALPIA 
CALPIA 
4. So/" 
5.3Yo 
7.2% 
8.2% 
6.8% 
17.6% 
16.8O/o 
NA 
NA 
13.8% 
15.4% 
11.1% 
10.0% 
10.0% 
NA 
NA 
36.9% 
58.6% 
7.4% 
4.8% 
NA 
NA 
181.2% 
300.7% 
262.0% 
37.0°h 
39.9% 
92 
209 
264 
NA 
NA 
NA 
NA 
500.0% 
541.7% 
146 
140 -
Credit union administrative expenses, averaging 10% are lower than those of CALPIA at 17% 
and higher than those of the banks, at 4% to 5%. Similarly, credit union salary expenses, 
averaging 5% are lower than those of CALPIA at 10%. This reflects higher staff levels and 
investment in loan analysis and collections at CALPIA and is manifest in higher levels of loan 
portfolio at risk of 16.2% in credit unions compared to 4.8% in CALPIA. Loan portfolio 
control costs can thersfore be paid for with higher provisioning costs as in credit unions or in 
higher staff costs as in CALPIA. The lower administrative and staff costs in banks reflect 
spreading the staff costs out across the higher volume of much larger loans. 
In conclusion: 
All but two credit tinions are better capitalized from retained earnings than the four banks 
reviewed from shareholder investment and retained earnings. CALPIA has a stronger 
institutional capital from donations and retained earnings. 
Loans, measured as a percent of per capita Gross National Product, for the credit unions 
averages 30°/o, marginally smaller than CALPIA at 37% in 1998 and 40% in 1999. 
When we apply the implicit cost of deposit interest rates to shares (ie. if the credit union 
paid the same return on shares that it pays on deposits) the return to assets (net operating 
income to average total assets) falls from 3.0% to 2.2%. 
Asset Utilization (operating income over average assets) in the credit unions is 
approximately half, at 12.9%, of that of CALPIA at 26.5%. Part but not all of the 
difference in asset utilization results from the lower credit union loan interest rates; a large 
portion of the difference results from the significant amounts of credit union liquidity 
invested in low return liquid investments. / 
Credit union operating expenses, staff expenses and other administrative expenses as a 
percent of assets are half as much as those of CALPIA. 1 
This reflects higher staff levels and investment in loan analysis and collections at CALPIA 
and is manifest in higher levels of loan portfolio at risk in credit unions. The lower 
administrative and staff costs in banks reflect spreading the staff costs out across the higher 
volume of much larger loans. 
Interest expenses for credit unions are slightly lower from credit unions mobilizing 
savings, than CALPIA accessing capital markets. 
El C. SUPERINTENDENCY OF BANKS INDICATORS 
SUPERINTENDENCIA DEL SISTEMA FINANCIERO: INDICADORES FINANCIEROS 
1 DELINQ 1 I I 
NET 
OVERDUE LOAN' FIXED RETURN RETURN 
1999) 
EQulIITY ' LOANS I AT RlSKl WEIGHTED ASSETS ON ON 
I I LIQUIDIN TOTAL ASSETS mT EQUITY EQUITY ASSETS . - . . .'OTAL 
S T.OANS 
IINSTITUTION (Srpt 
LUtilY- - I. -. .- 
BANCO AGRICOLA 39.8% 9.4% 2.5% NA 33.8% 7.9% 0.6% 
BA~~PA cnm ICXTFT~ 
KO 
VADORENO 
13 CUS CONSOLIDA'TED 26.3"/0 35.0% NA 16.2% 19.0% 8.6% 3.00, 
C.F. UNION (ACACU) 29.4% 29.8% NA 19.5% 34.5% 5.6% 1.70, 0 P nTx~ A .r nr A L.r. UIIU~VIILA 
I (ACCOVI) 23.0% 27.7% NA 14.8% 20.4% 11.1% 3.19 
- C.F. UNIDAD 
27.7% 27.3% NA 7.8% 30.4% 3.0% 0.89 
II The Superintendency of Banks publishes several indicators for financial institutions under its 
supervision. Applying these indicators to the credit unions allows us to review how they 
compare and where they will require work to conform to supervision. Credit union liquidity 
levels (at 26%) are similar to Banco Salvadoreiio and Banco de Comercio at 29%, below Banco 
Agricola and CALPIA at 40%. Credit unions' equity (including shares) stands at 35% 
compared to banks at 9% to 10% and CALPIA at 26%. 
The Superintendency of Banks measures delinquency with the archaic measure of loans 
overdue past their maturity date. As such, the delinquency figures reported by the 
Superinetendency do not measure the portfolio at risk and are not comparable to credit union 
measures of portfolio at risk. 
The return on equity in credit unions averages 9.9O/0 compared to 7.7% in CALPIA, 5% in 
Banco Salvadoreiio and Banco de Comercio and gO/O in Banco Agricola. Similarly, the return 
on assets in credit unions averages 3% compared to 2.5% in CALPIA, 0.4% in Banco 
Salvadoreiio and Banco de Colnercio and 0.6% in Banco Agricola. 
VII. CONCLUSION 
LI The objective of this study was to examine the role of credit unions in providing micro￾finance and small rural producer savings and credit services in El Salvador and to examine the 
impact of the CRECER-RFE on credit union provision of those services. This is the first part 
of a two-part study; this part assesses the credit union institutions. The second part will 
examine individual client level data ad will profile the credit union members. 
1 
Rural financial services today emphasize scale and depth of outreach to large numbers of the 
working poor through financially sustainable organizations. To be successful rural finance 
providers, credit unions must reach large numbers in terms of scale and depth of clientele. 
Furthermore, credit unions must diversify risk and intermediate from those who save and 
those who borrow through mixed outreach, aggressively mobilize savings to fund local loans, 
I I protect those savings with financial discipline and offer a full service array of loan products. 
- Scale of Market Coverage and Depth of Outreach 
In 1976, the FEDECACES system of 45 credit unions served approximately 36,000 members. 
As of 7/99 the CRECER project-RFE 13 credit unions scale alone served 67,817 clients. The 
I I project credit unions are Unibn, Dinhmica, Unidad, Progreso, Nuevo Siglo, Favorita, Solidez 
Total, El Esfuerzo, Principal, Sihuatehuacin, Uno, Avance, Unica. As of June, 1999 the 13 
project credit unions mobilized US$ 17.7 deposit savings and US$9.0 shares to fund a loan 
portfolio of US$ 25.8. 
I I The size of savings and Isms is often used as a proxy for income level and a measure of depth 
of outreach; hence small deposits and small loans suggest a low-wealth clientele. 
What most distinguishes credit unions from other non-bank financial entities offering 
microfinance services is the ability of the credit unions to mobilize mass numbers of small, 
voluntary, savings accounts. In 1998, the project average individual voluntary deposit account 
size was US$ 168.00. Yet, more importantly, the project median individual voluntary deposit 
account size was US$ 16.00. In other words, 50 percent of all voluntary individual deposit 
accounts were for amounts less than US$ 16.00. Deposit savings accounts are concentrated in 
the lower amount ranges; of which 65% are between US$ 0-30, and 22% between US$ 31-130. 
A total of 87% are less than US$ 130.00. 
I 
Of the sample 5 project credit unions, the average loan granted during 1998 was 
US$ 1,416 The median loan size granted was significantly smaller at US$ 605. Hence, half of 
the clients receiving loans were for amounts less than US$ 605. The sample project credit 
unioris granted 1,541 loans less than US$ 300, which represent 32% of the total number of 
loans granted. Of this loan group, 18% (850) of the loans were below US$ 150. These small 
loans con~prise only 3%0 of the total volume of loans granted. 
The 1998 project loan mean as a percentage of Gross Domestic Product per capita 
(GDP/capita) is 71%. The project median as a percentage of GDP/capita is 30%. Outstanding 
Loans, measured as a percent of per capita Gross Domestic Product, for the credit unions 
averages 55% CALPIA loans as a percent of per capita GDP was 37% in 1998 and 40% in 
1999. 
Service to the poor is blended with service to a broader spectrum of the local population. 
Credit union services are not focused exclusively on the poor. Service to the poor is blended 
with service to a broader spectrum of the local population. Smaller loarpsizes, typical of loans 
to the poor, tend to involve higher costs per client. Credit u,nions serving the poor can better 
maintain sustainability by spreading their costs across loa& of larger and medium sizes as 
well. In this manner, the credit union reaches a large absolute number of the poor on a 
sustainable basis 
Credit union loan portfolios are not targeted toward one specific segment of the market (i.e., 
micro-enterprise). Credit unions attend a wide range of loan purposes in order to respond to 
the financing needs of their members. The broad diversity of credit union loan portfolios is 
also one of the mechanisms used to minimize loan risk. Diversification spreads the potential 
loan risk among a wide range of economic activities (e.g., agriculture, housing, commerce, 
enterprise, etc.) 
Mixed Outreach 
Mesbah (1998) reported that me~nbers owning small businesses (in production, commerce, or 
services) form an important subsector of the credit union membership. The percentage of 
credit union members (socios and aspiuantes) who own a business was nearly 50%. In addition 
to the respondents themselves, a significant percentage of other members of their households 
U also owned and operated businesses. In fact, 64O/0 of members' households owned and 
operated a business. 
Salvadoran credit unions serve a diversified client occupation base. They do not serve micro￾U entrepreneurs or small producers alone. The resulting diversified client base helps to diversify 
risk. An economic sector-specific collapse is not synonymous to the credit union's collapse; 
only a proportion of the credit union's clientele would be adversely affected. 
Just as credit unions serve a mix of occupational backgrounds, they also serve a mix of income 
levels. Although credit unions do not attract the higher income level clientele they serve the 
working employed and lower middle income as well as the poor and low-income clientele. 
Credit unions have shown that the poor do indeed save in small amounts. But the credit 
unions have also shown that they need to attract the savings on working employed and lower 
middle class in order to finance the loans to the lower income and poor clientele. 
Savings Mobilization 
Project activities promoted aggressive marketing of savings services and membership growth. 
Technical assistance focuses on deposit services' safety, expansion of products and returns that 
are competitive with alternative savings opportunities. Savings mobilization efforts were 
highly successful, producing a growth of US$ 14.2 million in new savings during the project 
period. 
Project credit unions show a nominal saving growth of 37% in 1996, 54% in 1997, and 50% in 
1978. Through the first nine months of 1999, savings had grown 20%. Real savings deposit 
growth grew 24% in 1976,47% in 1977,46%0 in 1998 and 18% through Saptember 1999. 
1 Financial Disciplines 
Sound institutional controls and structures need to accompany savings mobilization in order 
to protect the savings and to manage efficiently the increasing number of small-balance 
accounts. To meet prudential standards, credit unions must instill the financial management 
disciplines of capital accumulation, loan classification, delinquency control, loan loss 
provisions, capitalization, and liquidity management in credit union management procedures 
and practices. 
Credit union shave put provisions for loan losses in place to meet international standards. 
Institutional capital (reserves and retained earnings) has risen from 5% to 7% of assets. Credit 
union profitability has been enhanced as the average return on loans has increased from 21% 
in 1976 to 26% in 1999 and the cost of deposits has decreased from 11% to 9%. Liquidity at 
project credit unions has increased from a low 10% of deposits in 1995 to an excessive 26% of 
deposits in 1999. Delinquency decreased from 37% in 1995 to 15% in 1999. 
Comparison of project and non-project credit unions suggests that other credit unions in the 
FEDECACES system have begun to mobilize savings also. However, the non-project credit 
unions do not exhibit the adoption of the financial disciplines of capitalization, provisions and 
delinquency control to protect those savings. 
Bank institutional capital ranges between 3.6% and 3.9%, except for the state owned Banco de 
U Fomento Agropecuario, which has -5.9% institutional capital. Therefore, of the 13 project 
credit unions, all but two are better capitalized than the four banks reviewed. CALPIA has a 
strong institutional capital of 11.1%. 
Credit unions show profit advantages in lower administrative and staff costs. However, 
much of their cost advantages are offset by low returns on use of funds. Asset Utilization 
(operating income over average assets) in the credit unions is approximately half, at 12.996, of 
that of CALPIA at 26.5%. Part but not all of the difference in asset utilization results from 
the lower credit union loan interest rates; a large portion of the difference results from the 
significant amounts of credit union liquidity invested in low return liquid investments. 
Credit union administrative expenses, averaging 10°/o are lower than those of CALPIA at 17% 
and higher than those of the banks, at 4% to Soh. Similarly, credit union salary expenses, 
averaging 5% are lower than those of CALPIA at 10% 
The return on equity in credit unions averages 9.9% compared to 7.7% in CALPIA, 5% in 
Banco Salvadoreiio and Banco de Comercio and 8% in Ba~lco Agricola. Similarly, the return 
on assets in credit unions averages 3% compared to 2.5% in CALPIA, 0.4% in Banco 
Salvadoreiio and Banco de Comercio and 0.6% in Banco Agricola. When we apply the 
implicit cost of deposit interest rates to shares (ie. if the credit union paid the same return on 
shares that it pays on deposits) the return to assets (net operating income to average total 
assets) falls from 3.0% to 2.2%. ,' 
Credit Services and Product Expansion 1 
To date, the CRECER-RFE project has done much to improve the project credit unions' 
credit risk analysis, credit administration process, and the collections methodology. However, 
loan growth has not kept pace with savings growth. As a result, an increasing amount of the 
mobilized funds are invested in liquid investments, rising from 2% to 15% of assets by 1999. 
Liquid investments offer a much lower return of 8% compared to 26% on loans. Therefore, 
credit unions need to focus attention upon increasing their lending activities or will suffer 
decreasing profitability. 
The project has not yet introduced new loan products that might better serve the demands of 
members. Members' financing needs should determine their credit union loan product 
offerings. Credit unions need to develop new products offering microentrepreneurs products 
that are flexible, taking into consideration their cash flow, and offering increased access with 
successful repayment. The project is now engaging in local training agencies to train credit 
unions in new loan products and methodologies. This needs to be a high priority far the final 
year of CRECER-RFE implementation. 
Annex A 
Occupation 
Micro￾entrepreneur 
Self-employed 
Business 
Student 
Sample included all project credit unions: 
Avance, Dinarnica, Esfuerzo, Favorita, Coop-Uno, Progreso, Solidez Total, Unica, Union, Nuevo - -. Siglo, Principal, Sihuatehuacbn, Unidad. 
Total 
Organization 
Total 
4136 
Total Male 
2125 
3133 
Public Sector 
Employee 
Private Sector 
Employee 
Homemaker 
Retired 
Other 
N/A 
N/R 
% Total 
6.64% 
Total Female 
2019 
2877 
5.03% 
6161 
454 1 
2116 
2234 
300 
7996 
20324 
4.62% 
1495 
9.89% 
7.29% 
3.4% 
3.59% 
.39% 
12.84% 
32.63% 
I 
1637 1 1 
1404 
3636 
2343 
13 1 
270 
182 
3873 
9424 
1465 8 
2518 
2124 
1985 
1963 
54 
A123 
10,871 
7 
74 
1 
7 
29 
ANNEX B 
1998 1 
Account Size 
$0 - 30 52,924 
TOTALS 1 69,378 
Sample size does not include Unica for Individual Voluntary Deposit Account distribution. 
Sample size does not include Unica, Nucvo Siglo for Share Account distribution. 
oluntary 
josits 
volume 
$292,272 
$664,913 
$439,609 
$461,548 
$6,693,545 
$8,551,887 
1998 Shares 
# 
23,250 
5,8 14 
4,706 
3,781 
5,039 
42,590 
volume 
$1 12,216 
$512,092 
$1,011,747 
$1,554,100 
$5,426,042 
$8,616,197 
Annex C 
AVANCE: Total Loans Awarded in 1998 In US$ 
LOAN SIZE VOLUME % VOLUME # O/o # 
0-1 50 men 13,631 2.10% 194 17.18% 
women 16,395 2.53% 254 22.50% 
total 30,025 4.63% 448 39.68% 
' 151-300 men 14,369 2.22% 76 6.73% 
women 18,679 2.88% 95 8.41% 
total 33,048 5.10% 171 15.15% 
:301-500 men 18,870 2.910/0 48 4.25% 
womcn 22,191 3.42% 55 4.87Vo 
total 41,062 6.34% 103 9.12% 
I 501-750 men 21,948 3.33% 35 3.10% 
FAVORITA: Total Loans Awarded in 1998 In US$ 
pa-. 
% # 
2.66% 
24.14% 
26.81% 
4.85% 
9.32% 
14.16% 
F 501-750 
# 
28 
254 
282 
51 
98 
149 
wonlell 
total 
women 
total 
%VOLUME 
0.39% 
0.82% 
1.21% 
2.14% 
3.88% 
6.03% 
men 
women 
total 
$ 1001-1500 
VOLUME 
2,184 
4,607 
6,791 
12,054 
21,861 
33,915 
LOAN SIZE 
63,576 
9 1,860 
41,629 
78.039 
$ 1501-5000 
$ 0-150 
$ 151-300 
36,213 
56,539 
92,752 
men 
women 
total 
$5001 + 
men 
women 
total 
men 
women 
total 
11.30% 
16.32% 
7.40% 
13.87% 
men 
women 
total 
I I I I I 
6.43% 
10.05% 
16.48% 
48,547 
59,132 
107,679 
men 
women 
total 
TOTAL 
158 
228 
48 
90 
63,954 
53,157 
117.111 
I 562,7571 100%) 1,0521 100% 
15.02°/~ 
21.67% 
58 
93 
151 
4.56% 
8.56% 
8.63O/0 
1O.5l0/o 
19.13% 
17,554 
17,056 
34.609 
5.51% 
8.84% 
14.35O/0 
11.36% 
9.45% 
20.81% 
42 
50 
$2 
3.12% 
3.03% 
6.15% 
3.99O/0 
4.75% 
8.75% 
30 
24 
54 
2.85% 
2.28% 
5.13% 
4 
2 
6 
0.38% 
0.19% 
0.57% 
' 151-300 I men 571 9.530/01 12,688.261 2.220/01 
0-1 50 men 
women 
total 
women 
total 
! 501-750 
38 
2 3 
61 
45 
102 
wornen 
total 
751-1000 men 401 6.69%1 32,877.701 5.74901 
SOLIDEZ TOTAL: Total Loans Awarded in 1998 In US$ 
WOIIIC~ 
total 
men 
LOAN SIZE I 
6.35% 
3.85% 
10.20% 
7.53'/0 
17.06% 
24 
84 
44 
93 
60 
women 
total 
$ 
- 
- 
- 
j 
- 
- 
- 
$ 
- 
- 
- 
1 - 
- 
- 
- 
, 
'1 
- 
- 
1 
# 
3,255.74 
254.00 
3,509.74 
9,730.57 
22,418.83 
4.01°10 
14.05% 
$1001-1500 
O/O # I volume 1 % volume 
0.57% 
0.04% 
0.61% 
1 .7O0/o 
3.92% 
7.36% 
15.55% 
10.03% 
15 
5 5 
$1501-5000 
14,831.71 
51.083.86 
men 
women 
total 
TOTAL 
17,686.17 
37,703.55 
36.252.15 
2.59% 
8.92% 
2.51% 
9.20% 
men 
women 
total 
3.09% 
6.59% 
6.33% 
5 1 
37 
88 
women 
total 
12,848.22 
45,725.92 
67 
4 6 
113 
2.24% 
7.99% 
8.53% 
6.19% 
14.72% 
2 
2 
598 
11.20°/o 
7.69% 
18.90% 
57,949.89 
44,067.08 
102,016.97 
0.33% 
0.33% 
100% 
JO. 12% 
7.70% 
17.82% 
171,357.70 
122,722.53 
294.080.23 
29.93% 
2 1.44% 
5 1 .37% 
15,896.3 1 
15,896.31 
572,435 
2.78% 
2.78% 
100% 
NUEVO SIGLO: Total Loans Awarded in 1998 In US$ I 
,OAN SIZE 1 # I %# ( volunle I Oh volume I 
0-1 50 men 1 0.24% 149.43 0.01% 
women 1 0.24% 9 1.95 0.0 1% 7 
3 151-300 lmen I 11 0.24%1 172.411 0.0l%l 
women 3 0.73% 574.71 0.04% 
total 4 0.97% 747.13 0.05% 
F 301-500 hen I 81 1.94%1 3,218.391 0.23%1 
women 6 1.46% 2,413.79 0.17% 
total 14 3.40% 5.632.18 0.40% 
f 501-750 lmen 1 461 11.17%1 29,195.401 2.07%1 
women 10 2.43% 6,206.90 0.44% 
total 56 13.59% 35,402.30 2.51% 
I J 
g 751-1000 men 36 8.74Oh 31,839.08 2.26% 
women 8 1.94% 6,781.61 0.48% 
total 44 10.68% 38,620.69 2.74% 
$1001-1500 men 90 21.84% 101,034.48 /7.16% 
women 2 1 5.10% 24,597.70 1.74% 
total 111 26.94% 125,632.18 8.90% 
women 57 13.83% 149,310.34 10.58% 
total 114 27.67% 296,647.82 21.01% 
$5001 + men 1 461 1 1.170/01 629,014.371 44.55961 
women 2 1 5.10% 279,885.06 19.82% 
total 67 16.26% 908,899.43 64.38% - 
412 100.OOO/o 1,411,823 100% 
SIHUATEHUACAN: Total Loans Awarded in 1998 In US$ 
$151-300 
($501-750 
I 1 I I 1 
men 821 4.50%1 49.968.371 1 .9 
% Volume 
0.45% 
0.01% 
0.05% 
women 
total 
men 
women 
total 
%# 
6.91% 
8.88% 
15.79% 
# 
126 
162 
288 
LOAN SIZE 
160 
296 
women 
total 
Volume 
11,662.13 
254.00 
11,916.13 
$0-150 
8 6 
143 
229 
L 
$751-1000 
men 
women 
total 
8.77% 
16.23% 
I04 
186 
$1001-1500 
- 
4.71% 
7.84% 
12.55% 
men 
women 
total 
women 
total 
61,3 14.22 
61,314.22 
5.70% 
10.20% 
men 
women 
total 
19,440.33 
3 1,695.52 
51,135.85 
2.34% 
0.26% 
6 1 
8 1 
142 
194 
380 
0.74% 
1.21% 
0.22% 
64,804.26 
114,772.63 
95 
113 
208 
2.48OL) 
0.49Y0 
3.34'/0 
4.44% 
7.79% 
10.64% 
20.83%0 
5.21% 
6.20% 
11.40°/o 
I 
510,181.84 
976,481.72 
52,829.02 
69,499.43 
122.328.45 
116,901.49 
138,693.10 
138.693.10 
19.5 1% 
4.19% 
2.02% 
2.66% 
0.52% 
/4.47% 
5.30% 
0.59% 
Annex D 
la 1 Total Loans Awarded to Men by Purpose In US$ 1 
l~redit Union I ~ommerce/~ro) Consumer ) Housing 1 Legal Services ) Emergency ) 
Nuevo Siglo 
Avance I 
LU 
duction/Service 
Sihuatelluac6n 
Solidez Total 
La Favorita 
TOTALS 
I'riticipal 
La Urlica 
El Esfuerzo 
TOTALS 
LI 
# 
68 
195 
Total Loans Awarded to Women by Purpose In US$ 
TOTALS 
Principal 
La Unica 
El Esfuerzo 
Volume 
354,168 
44,920 
# 
192 
244 
206 
170 
64 
703 
1,774 
36 
47 
1,857 
Credit 
Union 
Nuevo Siglo 
Avance 
Silwarchuacin 
Solidez Total 
La Favorita 
Volume 
340,322 
227,191 
1,051 
4,952 
62 
70 
# 
0 
30 
425,572 
37,556 
47,554 
909,770 
n/n 
n/a 
n/a 
Comtnerce/Prod 
uction/Service 
# 
40 
265 
346 
99 
301 
Volztme 
0 
28,928 
1,012,132 
n/a 
n/a 
n/a 
# 
7 
3 
386 
290 
199 
- 
1,311 
2,826 
136 
353 
n/a4,626 
Consumer 
Volume 
117,586 
62,899 
659,104 
37,196 
135,347 
# 
0 
28 
Volume 
115,517 
2,697 
1,143 
1,571 
107 
302 
Volume 
9 
1,336 
488,860 
286,912 
151,396 
1,494,682 
n/a 
n/a 
n/a 
1,494,682 
Housing 
# 
82 
293 
386 
191 
191 
1,317,948 
n/a 
n/a 
n/a 
94 
6 
51 
181 
248 
21 
129 
579 
Legal Services 
Vobme 
249,402 
251,994 
455,243 
201,789 
159,520 
Emergency 
162 
145 
22 
72 
183,845 
9,931 
44,222 
266,926 
n/a 
n/a 
n/a 
266,926 
# 
0 
24 
108 
2 
28 
286,768 
n/a 
n/a 
n/a 
34 
0 
6 
50 
0 
1 
10 
61 
Volilme 
0 
21,230 
244,597 
877 
20,065 
66 
0 
2 
6 
100,740 
0 
5,370 
224,324 
0 
n/a 
n/a 
224,324 
# 
1 
5 
55 
0 
5 
81,315 
0 
n/a 
n/a 
25 
0 
4 
57 
0 
0 
3 
60 
Volrrme 
14,368 
/6,113 
57,947 
0 
2,887 
2,986 
0 
80 
4,411 
0 
0 
n/a 
4,402 
95 
0 
0 
3 
# 
0 
51 
41 
0 
3 
5,641 
0 
0 
0 
Vobme 
0 
1,251 
4,306 
0 
83 

Proyecto CRECER 
Tabla de rangos de creditos por Destinos 
Cooperativa Financiera Progreso de R.L. 
Participaci6n del lotal 30.8% 40.6% 
Participaci6n del total 67.9% 58.9% 
1 Muieres I Hombres I Total 1 PRODUCCION I~umoroI % I Volumen I % I~dmerol % 1 Volumen I % l~umerol % 1 Volumen I % 
Totales 
$ 0 - $150.00 
$151.00 - $300.00 
$301.00 - $1,000.00 
- $1,001.00 - $5.000.00 
$5,001.00 en adelante 
Totales Globales 
- 
Muleres 
Numero 
536 
16 
53 
107 
6 
71 8 
Hombres Total 
% 
74.7% 
2.2% 
7.4Yo 
14.9% 
0 8% 
100.0% 
Numero 
0 
8 
29 
84 
22 
Volumen 
16,052.10 
29,661.62 
194,661.05 
1,812,593.84 
1,017,199.85 
3,070,168.46 
% 
4.0% 
5:6% 
20.3% 
58.7% 
15.4% 
Volumeri 
0.00 
16.358.55 
151,241.37 
1,422,545.00 
2,191.240.35 
Numero 
536 
, 24 
82 
191 
28 
861 
Volumen 
16052.1 
46020.17 
345902.42 
3235138.84 
3208440.2 
6.851.553.73 
% 
0.5% 
1.0Yo 
6.3% 
59.0% 
33.1% 
100.0% 143 
% 
0.0% 
0.4% 
4.0% 
37.6% 
57.9% 
% 
62.3% 
2.8% 
9.5% 
22.2% 
3.3% 
100.0% 
./. 
0.2% 
0.7% 
5.0% 
47.2% 
46.8% 
100.0%( 3,781,385.27 100.0% 100.0% 
Proyeclo CRECER 
Tabla de rangos de creditos por Destinos 
Cooperativa Financiera Uno de R.L. 
Parlicipacidn del total 40.7% 25.9% 
Participacidn del lotal 46 3% 53 2% 
Padicipaci6n del total 2 0% 3 4% 
Parlicipacpn del lotal 7.8% 14.9% 
Participacibn del tolal 0 3% 0.1% 
Participacidn del tolal 2 9% 2.4% 
Proyeclo CRECER 
Tabla de rangos de creditos por Destinos 
Cooperativa Financiera Dinarnica de R.L. 
I Mulores I Hombres I Total 
I COMERCIO l~ljnierol % I Volumen I */. l~tirnorol % I Volurnon / % I~bmerol */. I Volumen I ./r 
h 
I Muleres I Hombres I Total I 
1 0 - $1 50.00 
$151 .OO - $300.00 --- $301.00 - $1,000.00 
$1,001.00 . $5,000.00 
$5,001.00 en adelanle 
Participaci6n del Iota1 3 6% 3 5% 
1 Muicres I Hombres I Tolal I 
332 
25 
94 
222 
45 
Participaclbn del total 27 0% 21 4% 
I I lolales 
3.5% 
13.1"/0 
30.9% 
63% 
1 Muloros Hombres - Tolal 
SERVlClO Ntirnoro % Volurnon % Nihoro % Volumori % Numero % Volumen ./. 
$ 0 - $150.00 40 36 7% 3.602 45 0 3% 0 0 0% 000 00% 40 4 4% 3.602 45 0 2% 
--- $151.00. $300.00 4 37% 8.15004 07% 6 10 9% 12.396 36 1 2% 10 20.547 30 0 9% 
$301.00 - $1,000.00 30 21.5% 175.091 01 14.7% 17-= 81,927683 47 287% 257.81869 117% .- 
i B $1.001.00 - $5.000.00 31 28 4% 570,882 74 47 G% 26 47 3% 521.276 89 152 2% 57 34 8% 1,092,159 63 49.7% 
S5.001 .OO en adelanlo 4 3 7% 440.911 08 36 8% 6 109% 383.537 35 38 4% 10 6 1%. 824.481 43 37.5% 
Tolales 109 1000% 1.199.471 22 100 0% 55 100 0% 999.138 28 100.0% 164 100 0%1 2,198.609 50 100 0% 
Part~cipacibn del total 3 9% 4 5% 
i I Muloros 
I 7-- -- - tlom- Totel 
Totales I me A I I / I no VOII r *A I vo~umen I r f 
Participacibn del lola1 21 8% 25 7% 
718 
16,14267 
49.61897 
516,59077 
4,123,516 39 
3,710.991 40 
I I 
S 0 - $150.00 I 3 
$151 .OO - $300.00 ) 3 
1000% 
02% 
06% 
6.1% 
490% 
44 1% 
f1arlicipacr6n del total 2 9% 3 3% 
DEPURADOS 
S 0 - $ 150.00 
$151.00-$30000 
5301.00 - $ l.OOO.OO 
11.001.00 - $5.000.00 
$5,001.00 en adelanle 
Tolales 
86% 
86% 
14 3% 
486% 
20 0% 
100 0% 
5301.00-51,000.00 $1.001.00 - $5,000.00 
$ 5.001.00 en adelanle 
Tohles 
1 Muieres 
5, 
17 
7 
35 
8.416.860.20 
0 
12 
58 
111 
18 
Nlirnero 
15 
4 
32 
17 
7 
75 
50000 
5,33248 
29,404 90 
342.665 75 
520.892 78 
898,875 91 
Hombres 
100.0% 
00% 
60% 
29.1% 
55 8% 
9 0% 
% 
200% 
5.3% 
42 7% 
22 7% 
9 3% 
100 0% 
Ntimero 
0 
7 
18 
19 
1 
45 
Total 
01% 
0 6% 
3 3% 
38 1% 
57 9% 
100 OX 
Numero 
15 
11 
50 
36 
8 
120 
199 
000 
24.557 42 
368.817 23 
2.323.452 80 
1.503.907 14 
Votumen 
2.30265 
7.07875 
163.454 80 
335.864 89 
624.923.37 
1.133.624.46 
% 
0 0% 
156% 
400% 
42 2% 
2 2% 
100 0% 
0 
1 
8 
21 
3 
33 
% 
0% 
06% 
14 4% 
29 6% 
55 1% 
100 0% 
% 
12540 
9 2% 
41 7% 
30 0% 
6 7% 
100 0% 
1000% 
0.0% 
06% 
8 7% 
55.0% 
35 6% 
Volumen 
000 
14.559 73 
90.09863 
334.907 56 
50.621 52 
490.187 44 
00% 
30% 
24 2% 
636% 
9 1% 
100 0% 
% 
00% 
30% 
184% 
68 3% 
10 3% 
100 0% 
Vobnen 
2.302 65 
21.638 48 
253.55343 
670.77245 
675.544 89 
4.220.73459 
332 
37 
152 
333 
63 
*h 
0 1% 
13% 
156% 
41 3% 
41 6% 
000 
2.00000 
38.080 28 
387.84281 
170.978 73 
509.701 82 
1.623.811 901 100 0% 
100.0% 
36 2% 
4.0% 
166% 
36 3% 
6 9% 
00% 
03% 
6 5% 
64 7% 
28 5% 
100 0% 
917 
16.142 67 
74.17639 
885.40800 
6.446.969.19 
5.214.898 54 
3 
4 
13 
38 
10 
68 
0 1% 
06% 
7.0%. 
51 0% 
41 3% 
100.0% 
44% 
59% 
19 1% 
55 9% 
147% 
100 0% 
12.637.594.79 
500 00 
7.332 48 
68.365 18 
730.508 56 
100.0% 
0 0% 
0 5% 
46% 
48.7% 
691.871 511 462% 
1.498.577 731 100 0% 
Proyecto CRECER 
Tabla de rangos de creditos por Destinos 
Cooperativa Financiera Unica de R.L. 
Participacibn del total 25.3% 25.9% 
$5.001 .OO en adelanle I 11 0.9%1 44,304,601 8.5%1 31 2.2%1 162.322.301 16.6%1 41 1.6%1 206.626.90) 13.8% 
1061 100.0%] 524,249.901 100.OO/o) 137) 100.0%1 977,106.421 100.0%( 2431 100.0%1 l,SOl.356.32(lOO.O% 
Participacibn del tolal 62.8% 41.0% 
Participacibn del total 11.1% 33.1% 
I Muieres I Hombres I Total I Totales l~umerol % I Volumen I % l~umerol % 1 Volurnen I % f~umerol % I Volumen I % 
SERVlCIoS 
$ 0 - $150.00 
$1 51 .OO - $300.00 
$301.00 - $1,000.00 
$ 1,001 .OO - $5,000.00 
$5,001.00 en adelante 
Totales 
Participation del lolal 0.8% 0.1% 
$ 0 - $150.00 
$1 51.00 - $300.00 
$301.00 - $1,000.00 
$1,001.00 - $5,000.00 
$5,001.00 on adolanle 
Tolales Globales 
Muleres 
30 
24 
87 
47 
3 
191 
Hombres 
Numero 
2 
2 
Volumen 
1,390.40 
1,390.40 
Numero 
1 
1 
Total 
% 
100.0% 
0.0% 
0.0% 
0.0% 
0.0% 
100.0% 
15.7% 
12.6% 
45.5% 
24.6% 
t.G% 
100.0% 
% 
100 0% 
0.0% 
0 0% 
0 0% 
0.0% 
100.0% 
Numero 
3 
0 
0 
0 
0 
3 
% 
100 OYo 
0.0% 
0.0% 
0.0% 
0.0% 
100.0% 
23,015.70 
45.566 70 
461,570 00 
802,794 32 
201,406 GO 
1.534.353.32 
Volumen 
85000 
, 850.00 
% 
100 0% 
0.0% 
0.0% 
0.0% 
0 0% 
100.0% 
% 
100 0% 
0.0% 
0.0% 
0.0% 
0.0% 
100.0% 
% 
1000% 
0.0% 
0.0% 
0.0% 
0.0% 
100.0% 
Volumen 
2.240.40 
0.00 
0.00 
0.00 
0.00 
2.240.40 
I 
1.5% 
3 0% 
30.1% 
52 3'10 
13 1% 
100.O0/~ 
22 
21 
91 
53 
9 
196 
I 
0.7% 
1.8% 
23 3% 
38 1% 
36 1% 
100.0% 
11.2% 
10.7% 
46.4% 
27.0% 
4.6% 
100.0% 
15.317.05 
38,570 85 
495,924 28 
809,960.89 
767.143 95 
2.126.917.02 
52 
45 
178 
100 
12, 
13.4% 
11.6% 
46.0% 
25 8% 
3.1% 
3871 100.0% 
38332.75 
84137.55 
957494.28 
1612755 21 
968550 55 
1.0% 
2.3% 
26 2% 
44.0% 
26 5% 
3.661.270.34 100.0% 
Proyecto CRECER 
Tabla de rangos de creditos por Destinos 
Cooperativa Financiera Unidad de R.L. 
Participacibn del total 51.8% 21.8% 
Participacibn del lolal 18.7% 28.6% 
Participacibn del lotal 24.2% 37.7% 
$5,001.00 en adelante 1 11 5.9%1 93,324.041 43.0%1 21 6.5%1 102573.971 21.9%1 31 6.3%1 195,998.01 1 28.6% 
17) 100.0%1 217,110.261 100.0%1 31 1 100.0%1 469.31 1.37) 100.0%1 481 100.0%1 686,421,631 100.0% 
Participacibn del total 5.3% 11.9% 
Proyecto CRECER 
Tabla de rangos de creditos por Destinos 
Cooperativa cnanciera Sihuatehuacan de R.L. 
Parlicipacibn del total 31.4% 36.6% 
1 Muleres I ' Hombres I Total 
I CONSUMO (Numeral % I Volurnen I % l~um~~~l % I Volumen I % I~fimerol % I Volumen 1 % 
Particlpaci6n del lolnl 45.5% 35.9% 
I 
Parllcrpaci6n del total 5 2% 6.0% 
$ 0 - $150.00 
5151.00 - $300.00 
$301.00 - $1,000.00 
Sl,OOl.OO - $5,000.00 
$5,001.00 en adelante 
Totales 
b 
VlVlENDA 
5 0 - $150.00 
5151.00 - $300.00 
$301.00 - $1,000.00 
$1,001.00 - $5,000.00 
$5,001.00 en adelante 
Tolales 
Participaci6n del tolal 3 0% 0.2% 
I I Muieres I Hombres 1 Total 
LIQUIDEZ 1 N~irnerol % I Volumen 1 % 1 Nurnerol % I Volumen I % I Numeral % 1 Volumen I */a 
61 
66 
143 
102 
15 
387 
Parlicipacion del total 12 6% 16.4% 
Pariicipacibn del total 2 3% 4.0% 
15.8% 
17.1% 
37.0% 
26.4% 
3.9% 
100.0% 
Muleres Total 
Numero 
5 
3 
29 
62 
9 
108 
Hombres 
Numero 
5 
5 
62 
114 
13 
199 
f￾48,262.22 
125,630.47 
726,715.99 
1,955,483.53 
1.111,328.00 
3.967.420 21 
S 0 - $150.00 
$1 51.00 - $300.00 
$301.00 - $1,000.00 
51,001.00 - $5,000.00 
$ 5,001.00 en adelante 
Tolales 
% 
4.6% 
2.8% 
26 9% 
57 4% 
8 3% 
100.0% 
Numero 
0 
2 
33 
52 
4 
91 
% 
2 5% 
2.5% 
31.2% 
57.3% 
6.5% 
2 
2 
5 
9 
3 
21 
9.5% 
9.5% 
23.8% 
429% 
14.3% 
1.2% 
3.2% 
18.3% 
49.3% 
28.0% 
100.0% 
Volumen 
0.00 
4.896 32 
199.840 54 
751,254.55 
640.486.45 
1,596,477 86 
% 
00% 
2 2% 
36 3% 
57 1% 
4 4% 
100.0% 
0 2% 
0.5% 
3.1% 
199% 
76.3% 
1.554.30 
4.764.02 
29.822.85 
189.381.43 
726,994.51 
Volumen 
3.702.88 
6.16458 
164,626.33 
923.669.91 
1.029.827.39 
2,127,991.09 
% 
0 0% 
0.3% 
12.5% 
47.1% 
40.1% 
100.0% 
Volumen 
3.702.88 
11.060.90 
364.466.87 
1.674.924.46 
1,670,313 84 
0 
48 
138 
131 
13 
330 
% 
0.2% 
0.3% 
7.7% 
434% 
48.4% 
100 0% 
% 
0.1% 
0.3% 
9.8% 
45.0% 
44.8% 
100.0%( 3.724.468.95 
0 
1 
10 
5 
0 
100.0% 
100.0% 
952.517 11 l 100.0~/~ 16 
0.0% 
14.5% 
41.8% 
39.7% 
3.9% 
100 0% 
0.0% 
6 3% 
62.5% 
31.3% 
0 07'0 
inn n?kl 144 4~7 73 inn no/. 
I 
2 5.4% 1.554.30 0.1% 
3 8.1% 6,942.82 0 6% 
15 40 5% 77,428.11 7.1% 
14 37 8% 284.095.09 25.9% 
3 8 1% 726.994 51 66 3% 
I 
0 001 0.0% 
61 
114 
281 
233 
28 
717 
0.00 
93,105.91 
655.217.82 
2.519,411.91 
940,218.24 
4 207.953.88 
2.178 80 
47.60526 
90,713 66 
000 
0.0% 
2.2% 
15.6% 
59.9% 
22.3% 
100.O"/. 
1.5% 
329% 
65.5% 
00% 
0.6% 
2.7% 
16.9% 
54.7% 
25.1% 
100.0% 
I 
8.5%1 48,262.22 
15.9%1 218.736.38 
39.2% 
32.5% 
3.9% 
100.0% 
1,381.933.81 
4.474.895.44 
2,051.546.24 
8.175.374.09 
Proyecto CRECER 
Tabla de rangos de creditos por Destinos 
Cooperativa Financiera Favorita de R.L. 
Participacibn del total 43 0% 32 0% 
I Partlc1pac16n del total 44 9% 53 9% 
Partopaci6n del lotal 9 4% 11.3% 
Parttc1pac16n del total 1 2% 1.4% 
1 
Part~cipac~on del total 0.4% 0 0% 
Participacibn del total 11% 1.4% 
$1,001.00 - 15,000.00 1 72 
55,001.UO en adala~le 2 
Totales Globales I 523 
13 8% 
0.4% 
100.0% 
953.735.00 
140,383.38 
2,734.971.41 
34 9% 
5.4% 
100.0% 
70 
4 
295 
23 7% 
1 4%. 
100.0% 
961,294 63 
246,408.76 
2,196.553.45 
,sch￾11 2% 
100.0% 
142 
0- 
818 
17.4%- 
^ u.% 
1000% 
1915029.63 
* 394790~14 
4.931.524.86 
38 8% 
0%' 
100.0% 
Proyecto CRECER 
Tabla de rangos de creditos por Destinos 
Cooperativa Financiera Solidez Total de R.L. 
Participacion del total 1 .O% 1.2% 
Parlicipacibn del total 68.7% 85.3% 
Participacibn del total 1.2% 2.0% 
Participacidn del total 29.2% 11.6% 
$5,001.00 en adelante I 11 0.4%1 94,358.071 4.9%1 0.001 0.0%1 11 0.2%1 94358.071 2.0% 
Totales Globales 2761 100.0%1 1,919,612.21 1 100.0%1 3241 100.0%1 2,880,944.601 100.0%) 6001 100.0%1 4,800,556.81 1 100.0% 
Proyecto CRECER 
Tabla de rangos de creditos por Destinos 
Cooperativa Financiera Uni6n de R.L. 
Participaci6n del total 34 7% 42.2% 
$5,001.00 en adelanle I 381 4 0%1 3,033.629.951 38.5%1 471 8.2961 3,521,375 241 35.0'361 851 5.6%1 6,555,005.19) 36.5% 
9541 100.0%( 7,862,318,89100.0%1 5761 100.0%1 lO,Oi'I,54O.O81 100.0%1 15301 100.0%1 17,953.658.971 100.0% 
Participacibn del total 55 3% 45.5% 
Participacibn del total 2.3% 2.3% 
Parti~ipacib~del total 7 7% 10.0% 
I Muieres I Hombres I Total I Totales l~umerol % 1 Volurnen I % 1 ~urnerol % I Volumen I % INurneroI % I Volumen 1 % 
Proyecto CRECER 
Tabla de rangos de creditos por Destinos 
Cooperativa Financiera Nuevo Siglo de R.L. 
Participation del lolal 25.1% 37.5% 
Parlicipacibn del total 67.9% 45.2% 
Parlicipacibn del lotal 4.9% 6.0% 
Parlicipacion del lotal 2 1% 11.3% 
I Muieres I Hombres I Total I Totales 1Nurnero[ % 1 Volumen I % l~umerol % 1 Volurnen I % l~urnerol % 1 Volumen I % 
$151 .OO - $300.00 
$301.00 - $1,000.00 
$1.001.00 - $5,000.00 
$5,001.00 en adelante 
Totales Globales 
So-Slso.oo-------- 0 
17 
120 
87 
39 
263 
7 
6 
38 
55 
17 
123 
0.0% 
6.5% 
45.6% 
33.1% 
14.8% 
100.0% 
5.7% 
4.9% 
30.9% 
44.7% 
13.8% 
100.0% 
0.00 
31.500.45 
772,705.79 
1,432.982.61 
5,216.94 
11,096.05 
211,333.21 
1.120.251.45 
1,518,682.48 
2.866.580.13 
0.0% 
0.5% 
11.5% 
21.4% 
0.2% 
0.4% 
7.4% 
39.1% 
53.0% 
100.0% 
4,471,915.62, 66.7% 
6,709,104.471 100.0% 
7 
23 
158 
142 
56, 14.5% 
3861 100.0% 
1.8% 
6.0% 
40.9% 
36.8% 
5990598.1 
9,575,684.60 
62.6% 
100.0% 
5216.94 
42596.5 
984039 
2553234.06 
0.1% 
0.4% 
10.3% 
26.7% 
Proyecto CRECER 
Tabla de rangos de creditos por Destinos 
~oo~erativa-~inanciera El Esfuerzo de R.L. 
Participaci6n del lotal 10 8% 12 2% 
I Muleres I Hombres I Total 1 CONSUMO I ~tirnerol % I Volumen I % 1 ~tirnerol % 1 Volurnen 1 % I ~lirnerol % 1 Volurnen I % 
Parlicipacion del total 19 3% 29 4% 
0 
Participacibn del total 1 6% 1 0% 
Participac~on del total 0 6% 0 3% 
Parlicipaci6n del lolal 66 6% 55 4% 
$0 - $150.00 
$ 151.00 - $300.00 
$301.00 - $1,000.00 
$1.001.00 - $5.000.00 
$ 5,001.00 en adelante 
Tolales 
38 
54 
117 
92 
1 
302 
12.6% 
179% 
38 7% 
30 5% 
0 3% 
100.0% 
27.834 58 
104.41985 
640,990.22 
1,438,349.70 
44,469 OG 
2,256.069.41 
1 2% 
4.6% 
284% 
638% 
2 0% 
100 0% 
I I 
11% 
29% 
33 5% 
56 4% 
6 2% 
100 0% 
28.84585 
78.178.98 
918.618 70 
1.545.780 30 
170.875 18 
2,742.299.01 
44 
41 
160 
105 
3 
353 
82 
95 
277 
197 
4 
655 
125% 
11 6% 
453% 
29 7% 
0 8% 
100 0% 
125% 
14 5% 
42 3% 
30 1% 
06% 
100 0% 
56.68043 
182.598 83 
1.559.614 92 
2.984.13000 
215.34424 
4,998,368 42 
11% 
3 7% 
31 2% 
59 7% 
43% 
100 0% 
Proyeclo CRECER 
Tabla de rangos de creditos por Destinos 
Cooperativa Financiera Avance de R.L. 
Participaci6n del total 6 8% 11 2% 
Partic~pacidn del total 41 0% 69 8% 
Participocihn del lolal 4 7% 7 7% 
- - 
~uieres- Hombres Total -I 
Palticlpacibn dnl loL3I 33 6% 5 3% 
-- - -- 
Muiores L---- Hombres ! Total I 
Totales 
5 0. $150.00 
S151.00~5300.00 
5301.00- $1,000.00 
--- $1,001.00 - - $5.000.00 
15.001 00 en adelanto 
Nurnero 
258 
98 
161 
124 
ToLiles Globales I 64 11 100 0x1 2.989.095 7 1 
7'. 
40.2"/0 
153% 
25 1% 
19 3% 01 00% 
100 0% 
Volumen 
141,038.83 
164.101 64 
866.09520 
-!,817.86004 
000 
498 
'A 
4.7% 
55% 
3 
OOnA 
100 0% 
Nurnero 
200 
83 
114 
90 
3 
2,649,489 62 
% 
40 2% 
16 7% 
22 9% 
19 7% 
0 6% 
I00 0% 
Volumen 
124.00047 
170.843 86 
698,831 06 
1.459.27056 
196.543 67 
11391 100 0% 
% 
4 7% 
64% 
26 4% 
55 l% 
5.638.585 331 100 0% 
7 4% 
NDrnero 
158 
181 
275 
222 
3 
*/I 
402% 
159% 
24 1% 
0 3% 196543 61) 3 5% 
Volurnen 
2650393 
3349455 
1564926 26 
32771306 
% 
4 7% 
59% 
27 8% 
58 1%