Abstract:
The Rural Credit Union of Costa Rica was set up on the lines of the Community Credit Corporation of FINCA. The operations of the Rural Credit Union of Costa Rica are based on shares. Rural people who purchase shares are entitled to share of profits and also have voting rights. The total net profit at the end of the year is distributed among share holders. Also money lending services are carried put by the Rural Credit Union of Costa Rica.The Rural Credit Union of Santa Fe in Costa Rica has been developed as an investment institution to serve the rural population. The Rural Credit Union of Costa Rica was inspired by the FINCA (Foundation for International Community Assistance) initiative of "Community Credit Corporation". The Community Credit Corporation was set up to ensure economic independence of the Central American rural population. The Rural Credit Union of Costa Rica operates on the lines of a public corporation wherein the rural people are the shareholders.
The Rural Credit Union of Costa Rica does not operate on the basis of deposits and withdrawals similar to bank. The operations of this credit union are based on shares. The rural people can join as members by purchasing shares of the Rural Credit Union. As shareholders these people are entitled to share of the profits earned by the Rural Credit Union of Costa Rica. The shares are however saleable either in the open market or personally to an interested buyer.
The important principles of the Rural Credit Union of Costa Rica are -
- Determination of share price and volume of shares for IPO (Initial Public Offering) by founder members.
- Ownership of shares provides two rights - right to share of profits and voting rights. Voting rights are directly proportional to number of shares held. The more shares a person holds the more votes he/she can cast in policy decisions.
- 100% of net profit at the year end is distributed among shareholders in proportion of shares held by them.
- The Rural Credit Union of Costa Rica undertakes money lending services to both members and non-members.
