THE World Council of Credit Unions – headquarters in Madison, Wisconsin and Washington, DC – has just held its annual conference: in Dublin. The choice of Ireland is both highly symbolic and entirely appropriate.
Credit unions – often termed financial co-operatives – have established themselves across the globe.
There are more than 43,000 credit unions belonging to WCCU, in 91 countries, together serving 136 million members. Credit unions today lie at the heart of the worldwide co-operative movement.
But there is no country where their influence is more central to its way of life than Ireland. Go to any city, town or village and you are likely to see the credit union sign on display. But this is more than just good marketing – branches are often more visible than those of either banks or building societies.
"The Irish credit union movement is one of the great successes of Ireland, giving access to financial services across all social strata," Anne O'Byrne, President of the Irish League of Credit Unions ? the conference hosts ? told delegates.
"It started at a time when access to financial services was not widely available, especially to those of limited means. Now, the total assets of credit union members in Ireland are over US$16.4 billion [£ 9bn] and people from all walks of life are members.
"Indeed, Ireland has one of the highest per capita credit union memberships in the world – with more than three million members – approximately 50 per cent of the adult population north and south."
So, Ireland deserves the recognition of the annual conference taking place in Dublin, attracting 1,850 delegates from nearly 50 countries and injecting about ?2.5m (£ 1.75m) into the Irish economy ? making it one of this year's largest and most financially beneficial conferences for the country.
The significance of credit unions and the world conference was underlined by its opening by the Irish Taoiseach (Prime Minister) Bertie Ahern. "The first credit union in Ireland was founded in 1958 by Nora Herlihy," Ahern told the conference.
"We owe much to this woman who had the vision to bring the credit union model of co-operative financial support to this country."
Mr Ahern stressed that he sees credit unions as still central to the island's approach in tackling social exclusion.
"Ireland's credit unions continue to uphold their distinctive ethos of mutuality, volunteerism and self-help in working to empower their communities," said the Taoiseach, who acknowledged that credit unions are the biggest providers of social finance in the Irish Republic.
As in the UK ? through the Cohen report's proposals for a Social Investment Bank, considered in this column in the last issue ? the Republic is developing a Social Finance Initiative to increase the provision of social finance.
"The initiative will see the establishment of a not-for-profit social finance company to act as a wholesale supplier of social finance to invest in community infrastructure and local development," reported Mr Ahern.
"This initiative was strongly informed by the innovative programmes of social investment, pioneered by credit unions in Ballybane and Tipperary ? a clear example of the positive influence that credit unions have had on how we invest in our communities."
While Britain is unable to claim the same success rate as Ireland, the movement is progressing well. The UK is one of the world's richest countries (though not, ironically, quite as rich as Ireland, per head of population).
Yet that national wealth hides enormous deprivation. Credit unions can provide real and important assistance in overcoming this.
Figures just released from the Association of British Credit Unions show that in a large survey of credit union members (1,500 people were questioned) the benefits of membership were substantial.
Some 22 per cent of surveyed members had previously used some form of home credit. Of these, 41 per cent had stopped using home credit schemes because they borrow from their credit union.
As some home credit charges very high rates of interest – some loan sharks charge 200 per cent, or more ? we can easily see the value of credit unions.
In general terms, credit union members are more likely to be financially marginalised. Some 17 per cent of credit union members have no bank account, compared to just seven per cent of the general population.
In line with these findings, the survey concluded that credit union members are more likely to be on low incomes and in social housing. For a third of members, the union is the main way of saving ? and an impressive three quarters of those questioned save regularly with their union. But while credit unions offer an important service in providing savings accounts, in itself this does not solve the problem of financial exclusion.
Current accounts are also very important – they provide more efficient ways of paying bills and enable employers a simple way to pay their staff.
They provide status to the individual and reassurance to those with whom the consumer has dealings – making it more likely they can be employed and open credit accounts for utilities and other services.
In turn, this can improve people's income and reduce the cost of services.
It is therefore real progress that credit unions will soon be offering current accounts – a move enabled by the Co-operative Bank in providing the back office services.
Credit unions have shown the whole of the Co-op Movement that by concentrating on social objectives and quality services there is a continuing and relevant role for co-operatives in modern society. It is a message all of the Movement should absorb.
In this article
- Bertie Ahern
- British co-operative movement
- Cooperative banking
- Credit union
- Credit Union Central of Canada
- Credit unions in the United States
- Dáil Éireann
- Financial institutions
- Irish League
- Irish League of Credit Unions
- Social economy
- Social Issues
- Washington, DC