Highlighting the potential of cooperative banking and credit unions
In response to International Day of Cooperatives that took place on July 2, we examine resources that highlight the cooperative system for financial service providers addressing poverty impact and financial inclusion. Credit unions are member-owned / client-owned, not-for-profit financial cooperatives that provide savings, credit and other financial services to their members. Credit unions pool their members' savings deposits and shares to finance their own loan portfolios. Credit unions offer a lower cost option to consumers. This allows consumers to retain greater consumer value, but also provides lower price option pressure on alternative for-profit financial institutions, such as banks or micro-finance institutions.
Brian Branch, President and CEO of WOCCU, expands on some of the advantages and challenges for credit unions working on financial inclusion. One of the greatest challenges for credit unions are the regulatory burdens which increase the relative costs of serving small savings accounts and loans, therefore reducing the economic feasibility of financial inclusion of low income clients associated with small accounts. One of the greatest advantages of credit unions today is their ability to combine into networks for shared back office services to achieve greater efficiency or share platforms to offer consumers more expensive and sophisticated services less affordable to smaller stand-alone institutions.
Let's look at some of the publications in the Microfinance Gateway Library that address cooperatives and financial inclusion. We'll also include some resources for going into greater depth into the structures and practicalities of cooperatives and credit unions.