Field Notes: A Blog of the Worldwide Foundation


WOCCU Credit Union Partner Coonecta Leads Interoperable Digital Financial Inclusion in Ecuador

WOCCU’s Ecuadorian subsidiary, Coonecta, is driving interoperable payments in Latin America with its mobile platform BICOO, addressing key barriers facing the unbanked: cost, distance, documentation requirements and a lack of connection to other national payment channels. Credit unions (through BICOO) and banks (through their BIMO app) in Ecuador have simultaneously released interoperable platforms in an effort to increase financial inclusion through new digital channels.

Credit union members using BICCO Mobile Wallet

Formed a decade ago with support from a USAID/Ecuador-funded project, Coonecta is the foundational organization for extending digital financial inclusion to the remaining 49% of unbanked people in Ecuador. WOCCU and Coonecta are also investigating ways to work with Ecuador’s network of credit unions to use innovative platforms like BICOO to extend financial services to other vulnerable populations in Ecuador—including Venezuelan migrants seeking opportunities to be included in the formal financial system.

Like many of its neighbors in South America, Ecuador has seen explosive growth in the uptake and use of mobile technology in the last decade. Over 90% of its population is now connected through a mobile device. Mobile phones, in particular, provide financial institutions with a reliable platform to increase their customer base by lowering barriers to open bank accounts or to offer new services to existing customers. With only 51% of Ecuadorians owning a bank account, the opportunity for financial institutions to offer new mobile or web-based platforms holds great promise in addressing the barriers of cost, distance and information inequality and, in doing so, expand financial inclusion.

To address this gap, Coonecta, a transactional and technology network of more than 70 credit unions, has introduced the BICOO mobile wallet. This new tool allows users to make payments, request money from other users, and track their payments and requests through a simplified interface. Unbanked users can select their preferred participating financial institution and open a basic savings account from the application with only their ID number and phone number. They can then process transactions with other users through the application, regardless of their counterpart’s own financial institution. With the objective of providing an alternative to low-value cash transactions, the first iteration of the application focuses on low-value P2P transactions with a $50 maximum per transaction, and both weekly and monthly maximums as well.

“Credit Unions in Ecuador, through BICOO, are leading interoperable digital financial services in
the region, facilitating access to financial services--especially savings—to face risks, build assets
and improve their cash flows. This reduces the vulnerability of the unbanked and the low-income
population and gives current credit union members convenient access to the national
payment system,” said Oscar Guzman, WOCCU Regional Director for Latin America and Chairman
of the Board of Coonecta.

Ramiro Baldeon, Coonecta CEO (Right) and Juan Carlos Urgilés, Jardin Azuayo CEO, one of the largest credit unions in Ecuador with more than 470,000 members, at a promotional event for BICOO.

Cost of Account Ownership

According to the 2017 Findex report, in neighboring Brazil, Colombia and Peru, “almost 60 percent (of the unbanked) cited cost as a barrier” to owning a financial account due to the perceived minimum
requirements for account ownership or required saving amounts. To address this barrier, the BICOO
application requires only a basic account that new users can open directly from the application at no
additional cost and can link to existing savings accounts. Through the basic account, newly banked
individuals will have access to the application and can begin transacting with other BICOO or BIMO users immediately. While the application does require a $0.09 fee per transaction, these minimal costs are offset by decreasing travel costs to ATMs, traditional branches and even correspondent agents. It also provides increased safety and convenience for customers from different financial institutions to transact with one another nationwide. Additionally, the basic account serves as an introductory link to formal financial institutions where new customers can create relationships with their preferred institution and learn more about the benefits of saving through financial and digital literacy training—the next step for Coonecta to reach an even larger population through the use of these accounts.

Distance to branch location

According to WOCCU’s experience, the transport cost of traveling to physical branch locations could
represent 20% to 50% of the individual’s monthly average savings. With only about ten bank branches per 100,000 people, long-distance travel to banks may require remote customers to make costly trips to withdraw cash in order to cover expenses within their communities. The BICOO app offers a new alternative to small cash payments between individuals. When making transactions in their community, BICOO users neither have to rely on having the right amount of cash nor worry about their safety when carrying it. With the additional benefit of reducing the need to carry cash, users in remote areas will be able to rely on a new platform where they can track their inflows and outflows, require fewer costly trips to their branch, and begin using mobile banking through a simple interface that is easy to use and understand. Rather than introducing a complex application that requires a deeper understanding of digital technology and financial instruments, the BICOO application is meant to be an introduction to mobile payments and provide a simple alternative to low-value cash payments.

Required Documentation

Lack of proper documentation is cited by 20% of the global unbanked population as a significant barrier to opening a financial account. As previously noted, the BICOO app works with existing credit unions and bank accounts, but also offers a simple alternative for newly banked users—the basic account which only requires that the user have a government ID and cell phone number. While not an existing feature in the current application, digital platforms like BICOO can also serve as a central platform to share information about requirements for other financial services and promotions offered by credit unions—and decrease the risk of wrong or misleading information being shared through informal channels.

Be sure to follow our Digital Transformation Lab for the latest news on our global efforts to extend
digital financial inclusion—and efforts by partners like Coonecta, as they launch BICOO pilot programs in Ecuador.

Conor Farrell has been working in international development for five years, bringing a passion for finding and supporting innovative solutions to address global issues. At the World Council of Credit Unions, he works as Program Officer on the Technology and Innovation for Financial Inclusion project that seeks to increase access to and use of mobile and digital technologies around the world. Prior to joining WOCCU, Conor worked on the Mobile Solutions and Technical Assistance and Research project at FHI 360 and as a Community Economic Development volunteer with the Peace Corps in Costa Rica, supporting grassroots efforts to increase economic participation and opportunity in the Caribbean town of Linea Vieja.


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