Russia – Cooperative Development Program (CDP)
Providing Farmers with Enhanced Access to Financial Services
Cooperative development is an ACDI/VOCA initiative. ACDI/VOCA and USAID, together with the USDA, demonstrated through the Cooperative Development Program (CDP) in Russia that lending to Russian private farmers and rural enterprises can be profitable and that farmers are capable of borrowing and repaying loans at market interest rates. A previous ACDI/VOCA project established a fund for financing agricultural credit cooperatives, which since 1998 was successful in increasing the number of rural credit cooperatives (RCCs) 40 times over and membership by 162 times. As of July 1, 2007 through the efforts of ACDI/VOCA and the Russian Government National Project, there were over 136,000 members in 1,698 RCCs.
A central loan fund to support RCCs was established under the auspices of the program partner Rural Credit Cooperative Development Fund (RCCDF) with starting capital of $6 million. With the loans, farmers could afford much-needed machinery, extra workers and new plots of land. Without them, many would be faced with economic stagnation or reversal. RCCDF maintained a loan portfolio of $12.1 million, and the consolidated loan portfolio for all RCCs was over $150.3 million. The popularity of and need for Russian cooperatives is further shown by their preponderance: 1,698 of them were located in all federal subjects.
The impact of cooperatives is profound. In a recent survey 95 percent of RCC members said the loans had either increased or helped them to maintain their level of well-being. Practically all respondents planned to borrow more money in the future and two-thirds planned to increase loan sizes. Member participation was high, with over half taking part in credit cooperative member meetings. By comparison, many U.S. production credit associations struggle to get a 15 percent turnout. Ninety-six percent of respondents stated that the loan process at their RCC was less complicated than at banks.
In order to secure the future of cooperatives in Russia, CDP encouraged favorable legislation for agricultural cooperatives while strengthening a three-tier network of cooperative financial institutions, including a national credit cooperative and regional credit cooperatives. In particular, CDP focused on achieving a greater scale of financial assistance and strengthening support organizations such as the Training and Advisory Center, Union of Rural Credit Cooperatives and Special Union of Rural Credit Cooperative Auditors (Special Auditors’ Union), which were reorganized into a self-regulatory organization, including at least 40 regional special audit unions for over 1,000 rural credit cooperatives.
The success of cooperatives depends on their ability to stand on their own. ACDI/VOCA is committed to the sustainability of its efforts and therefore teaching skills that will be used long after the project has officially ended.
Other ACDI/VOCA CDP projects include Brazil, Mozambique, Paraguay and the Resources for Cooperative and Association Excellence in International Development website.
