The “Jardín Azuayo” Savings and Loan Cooperative, Ecuador: A Governance Model for Rural Outreach

The case demonstrates a reversal in the trend of rural siphoning (taking savings from rural areas to finance urban lending) common in Ecuador and elsewhere. Financial management of Jardín Azuayo enables it to transfer surplus resources from offices that have a positive balance from deposits gathered toward offices that have a deficit but that need resources for lending. This has improved JA’s image and trust among members in remote areas. Members report a strong sense of ownership because of the community. Equally important to them is the range of competitive products available including various loan and savings services but also money transfers and more recently, electronic banking.

The case also provides interesting lessons for policy and regulation. Jardín Azuayo is a self-financed cooperative that has successfully moved from a system of selfregulation to prudential supervision by the Superintendency of Banking and Insurance (SBS). It has done so through strong information and reporting systems, standardization and built internal capacity.

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