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

This paper discusses Jardín Azuayo Cooperative (JA) from Ecuador, highlighting its key features, namely, member participation and decentralized representative governance.

With twenty of its twenty-three offices in rural areas, this cooperative has over 50,000 members in rural areas. JA has managed to achieve efficiencies through scale. Its characteristics include:

• Financial sustainability with low portfolio at risk and high operating efficiency;
• Resource dedication to member education for ensuring local development;
• Transfer of surplus resources from offices with a positive balance to offices that need resources for lending;
• Range of competitive products including loan and savings services, money transfers and electronic banking;
• Decentralized governance structures through local councils;
• Effective and increased participation of rural members;
• High trust and ownership among members;
• High growth in savings.

JA’s governance model is now considered an example of civic participation and operational control worthy of emulation. The self-financed cooperative has successfully moved from a system of self-regulation to prudential supervision by the Superintendency of Banking Insurance. It has done so through strong information and reporting systems, standardization and internal capacity.