How has the last year been for the sector?
It is hard to keep up with the number of shocks and events that impact our daily lives – yet, credit unions across the globe once again shown an outstanding level of resiliency, posting year-on-year growth despite a third straight year of disruption.
Just as we thought we were emerging from Covid-19, the world is roiled by the war in Ukraine, rising inflation, higher energy costs, food insecurity and the climate crisis unfolding before our eyes.
Credit unions in Ukraine were thrust into a war simply unimaginable in today’s times. By June 30, at least 23 credit unions across Ukraine had suspended operations, and many are now in occupied territories.
Within days of the Russian invasion, our Worldwide Foundation for Credit Unions called on credit unions across the globe to lend a hand. The response was overwhelming, with more than US$1.8m (£1.49m) raised to date. The funds have been tapped to support farmers, so they can produce food for their communities, and to support the operating costs of credit unions.
But the war in Ukraine was hardly the only challenge. Across the globe, Woccu member credit union associations identified macroeconomic issues, regulatory barriers, inadequate access to technology and payments, and economic pressures as their biggest concerns. However, our international advocacy scored some major wins for credit unions, prompting:
- The International Accounting Standards Board to issue a proposal that permits credit unions to state their financials in conformity with the “lighter” IFRS for SMEs accounting standard.
- Both the G20 and the Basel Committee on Banking Supervision to issue guidance encouraging national regulators to consider tailoring its standards for less complex financial institutions, such as credit unions.
Reducing these regulatory concerns will help align credit union expenses.
Finally, credit unions have continued to prove themselves as essential providers of credit and savings to the vulnerable and underserved. Woccu’s Economic Inclusion Project and its partner credit unions in Peru and Ecuador have eased economic insecurity and the pressures of migration and displacement across the region – particularly for displaced women at risk of domestic violence, economic and climate refugees, and low-income local residents who are left out of the financial system. This is one of the countless examples of advancing financial inclusion through credit unions.
What are your hopes for the future?
Woccu is focused on three major themes in the coming year: digitalisation, sustainable finance and resilience.
We are reimagining the Global Bridges programme, which allows credit unions around the world to participate in, support and learn from other international credit union systems that are innovating in their own markets.
We are working to solve gaps in payments access, removing friction and easing the obstacles to digital transformation that limits competitiveness.
We hope to better position credit unions as a force for climate adaptation and being part of a transition to a green economy.
My goal is for credit unions to be recognised as larger players and essential providers in financial systems that work for ALL. There is so much potential for learning, growth, and innovation that we see everywhere. Our best days are ahead of us.