The credit union and co-operative movements need to “raise our game” if they are to win over those left disillusioned by the world’s ruling institutions, says Co-op Group member council president Nick Crofts.
Mr Crofts made the remarks in his keynote speech to the annual conference of the Association of British Credit Unions (Abcul) in Manchester.
He also said it was important to break down the “artificial barriers” between the co-op and credit union movements, recognising both were involved in building “a better way of doing business, one which benefits everyone”.
Mr Crofts said the Co-op Group was playing its own part in this by supporting credit unions.
“We are talking to our colleagues about financial management and where they can find support and who they can trust,” he said. “We know that every pound that goes into a credit union is reused and fed and watered many times over.”
He gave the example of the Group’s work with Homes With Style, a social enterprise in Huyton, Merseyside, which sells affordable furniture, including Co-op Electrical products, backed by fairly priced finance from local credit unions Enterprise and Riverside.
The project offers an affordable alternative to rent-to-buy outfits, which, said Mr Crofts, charge “sky-high” rates of interest, inflate their product prices and mis-sell warranties – “exploitation which targets people subsisting on the margins of society”.
“It proves what we all know – that there is a better way of doing business, one which benefits everyone,” Mr Crofts told delegates. “This is co-operation in action, people working together for the benefit of each other.
“Join a credit union and you become part of a global movement.”
But he warned of “an artificial barrier between credit unions and the co-op movement. It’s important to bring those barriers down.”
He added: “Our chief executive, Steve Murrells, wants to build a stronger Co-op and a stronger co-op movement. He understands we are not merely a loose collection of businesses but something which is greater than the sum of the parts, or at least we should be.
“It has something to offer when trust in institutions appears to be at an all-time low. There are real feelings of abandonment and disillusionment felt by millions of people around the world.
“But sadly collective and collaborative ways of working seem not be so attractive any more. We don’t seem to join things any more unless there seems to be a prospect of personal gain – we’re more likely to join the National Trust than a co-op or credit union.
“So how do we create strong co-ops and a strong co-op movement that people want to be a part of? Finding out how to be relevant in people’s lives and communities is as important now as it was for the Rochdale Pioneers in 1844. They successfully met an unmet need that gave people a feeling of confidence and security.”
Credit unions can do the same thing today, he said – “but we know that too many people are going to lenders who don’t have their interests at heart. We need to up our game.”
Investment in digital to give borrowers a smooth experience to match that of expensive rivals was vital to capture a new generation desperate for ethical products and a sense of ownership, he added.
“This is a time of opportunity and we must not miss it … We need to strengthen ways we work in our communities and be smarter. not be overwhelmed, we must be inspired – our time has come.
“People in this room, one loan at a time, are changing the world and you should be proud of that.”