Thanks to BRS, I can give something back

06 September 2023

Carol Souza Fernandes had worked only two weeks for KBC Group when she was approached by BRS. Would she should be interested in supporting two Ecuadorian microfinance institutions (MFIs) as an anti-money laundering law expert regarding compliance with local and international legislation and regulations? Carol had never heard of BRS before, but being Belgian with Brazilian roots she was familiar with the living conditions in South America and the importance of microfinance. She didn't hesitate a moment. In April, she left for her first BRS assignment, together with other KBC volunteers.

What do they need?

"This assignment had already started before my departure. Together with Patricia Hollinger of the BRS Institute, I had a few online meetings with the two savings and credit cooperatives that I was to visit, Hermes Gaibor and San Antonio. They explained they were looking for support in setting up a control framework, and describing a compliance policy and the rules and job descriptions for the person responsible for this. And they were very keen for advice on how to tackle possible money laundering.

You can discover more on the ground

In a first webinar, I took them through the basic principles of a good control system. But I kept the real work for when I was on the ground. This gives you more insight into the concrete needs, their operation and the technology available. 

For example, the control policy of Hermes Gaibor, the youngest of both organisations, is still in its infancy. We started with the basic principles and took a first step towards developing a policy charter and distributing responsibilities. San Antonio, a cooperative with a longer history and a higher ranking, is clearly at a more advanced stage. But there, too, we discovered gaps. For example, they were  unaware of important restrictions on money transactions to and from abroad, imposed by international regulations and also applicable to part of their banking activities.

Combining trust with control 

Compliance is always complex. And so it is difficult also for cooperatives when they have to guard themselves against fraud and irregularities. Especially when people know each other well, there are potential conflicts of interest. Why would you delve deeply into a friend's credit application if you trust that person completely? And what if you suspect abuse by a neighbour with whom you get on well? These questions were addressed in workshops on 'Business ethics' and 'Dealing with dilemmas'. 

Vulnerable to money laundering

In addition to the relational aspect, we also came across challenges that were specific to the region. Through the stories of the people you meet, you discover the difficulties these cooperatives have to navigate. Drug routes and human trafficking channels cross through this region. High levels of criminality combined with extreme poverty, lack of security and an absent government make these MFIs more vulnerable to money laundering. Hermes Gaibor, for instance, suspected that one of their clients – consciously or otherwise – was being used as a money mule by drug dealers. A major risk for the cooperative, as it could lose its banking licence. 

It requires confidence to talk about this. Only by being present on site and through human contact can you build up a relationship that allows this. 

Give back what I received myself

Hermes Gaibor and San Antonio are now working to protect themselves against fraud of all kinds. And I really want to help them with that. I have been fortunate to have had many opportunities throughout my life. I was able to study and was encouraged to develop myself. Now it's my turn to share knowledge and give others opportunities to grow. Volunteering for BRS fits in perfectly with this. Like BRS, I want to strengthen organisations that offer people opportunities. Because I believe in a better world and want to help build it. That gives me fulfilment and makes me happy."