The savings and credit cooperative was introduced to Asian countries by the British colonial government as solution to the rural credit in India and Sri Lanka more than 100 years ago. Even before they had fully consolidated in Germany, cooperatives began spreading in some countries of Asia. In Thailand, cooperatives were introduced in 1915 and in the Philippines in 1892.
Credit unions had a turning point in the 1960s when for the first time; the credit union training was conducted in Bangkok, Thailand by Social Economic Life of Asia (SELA). The conference was attended by young enthusiastic leaders across Asia who later on pioneered credit unions in their respective countries.
The Training cum seminar was very comprehensive and extensive covering those subjects as social and economic significance of credit unions, credit union philosophy and principles as well as credit union management.
In collaboration with the Philippine Credit Union League (now Philippine Federation of Credit Cooperatives or PFCCO), CUNA (stands for Credit Union National Association in the USA) International organized the 1st training on Credit Union Development Course in Asia in 1961 in Baguio City, Philippines. The training brought together 25 delegates in 12 countries. As follow up of the training, credit unions principle philosophy and ideas were spread all over Asian countries resulting to establishment of first credit union in the Republic of China (Taiwan) in 1963, Hong Kong in 1964, Japan and Thailand in 1965, Malaysia and Vietnam in 1966, and Indonesia in 1970. Korea had already started the first credit union in 1960. Having established credit unions, the Philippine Credit Union League was established in 1960.
The same number of countries attended the second training organized with the Ministry of Agriculture and Cooperatives and Kasetsart University in October, 1965. The most attended was the third course conducted at Xavier University in Cagayan De Oro City in the Philippines in April 1969. It drew nearly 100 delegates from 15 countries in Asia including the World Council of Credit Unions (WOCCU) which was formed on the same year. Delegates realized the importance of having a regional body for credit unions to provide platform for sharing experience and learning among Asian credit unions. The training then concluded in the appointment of a Planning Committee mandated to plan for the establishment of the Asian Confederation of Credit Unions.
On April 28, 1971, delegates from 9 Asian countries - Japan, Hong Kong, Korea, Malaysia, the Philippines, Indonesia, Taiwan, Thailand, and South Vietnam came to Seoul, Korea to fulfill an individual collective dream - to cooperate with neighbors for the good of all. The representatives convened to assist and support the Planning Committee in developing the necessary requisites towards the formation of the confederation - an alliance of actual credit union centers leagues, federations of Asian countries with the mission to assist members to organize, expand, improve and integrate credit unions so they can fulfill their potential as effective instruments for the development of people in Asia. The Asian Confederation of Credit Unions or ACCU for short was officially formed.
After the 4th Asian Regional Credit Union Training Seminar, the confederation held the Inauguration Meeting at the Cooperative Education Institute in Seoul. The meeting enacted the bylaws and approved the series of meetings of the Planning Committee. On that momentous day, the national leagues in Asia transferred their membership from WOCCU to ACCU.
Having already formed their national leagues, five of the nine Asian countries Japan, Hong Kong, Korea, the Philippines, and Taiwan became the founding members of the confederation. The first year membership dues received was US$ 91 from the five founding members.
The Board Meeting of WOCCU held in Minneapolis, Minnesota, USA on May 19, 1971 approved the membership of ACCU. The certificate of membership reads: "ACCU is accepted in the worldwide credit union movement and is a participant in all programs and provided by WOCCU Inc. services.”
The affiliation entitled the members of ACCU to WOCCU services such as training programs, and technical support in feasibility studies, developing institutional growth development plans, and legal assistance that leads to the registration of national leagues and federations with their governments. The following year, Augustine J. R. Kang representing ACCU at WOCCU Board Meeting in Halifax, Canada, put the young ACCU into the world map of credit unions.
Seconded by WOCCU, the Board of Directors appointed Augustine Kang, Jr. as the first General Manager of ACCU. From 1971 to 1982, ACCU office had been based in Seoul with the office provided by the National Credit Union Federation of Korea. In 1983, the ACCU office was moved to Thailand and a new General Manager Mr. Somchit Supabanpot was appointed who served until 1994. He was replaced by the current Chief Executive Officer Ranjith Hettiarachchi.
The Credit Union League of Thailand provided an office space for ACCU from 1983 to 1988. The confederation bought a five storey building in 1989 for its office and had used this building until May 2010.
In its role as a regional organization for credit unions, ACCU performs representation, development, liaison and coordination functions on behalf of the Asian credit union movements. It also provides members and potential members’ services in long and short-term technical assistance, training, and information. Governed by a Board of Directors representing member organizations, ACCU operates through six Divisions: the Planning and Development, Member Services, Promotion, Marketing and Research, Business Development, and Support services.
ACCU operates as a regional representative organization of credit unions and similar cooperative financial institutions in the region of Asia. ACCU is representing 40.2 million individual members from more than 45,000 credit unions in 22 countries in Asia.
ACCU is owned by its member organizations. Member categories are:
General Meeting: is composed of the official delegate from member organizations. The regular members have voting right and thus can be elected in the Board.
Board of Directors: the General Meeting elects five (5) Directors from the voting regular members to oversee ACCU business. Those elected by the General Meeting shall elect among themselves: President, First Vice-President, Second Vice-President, Secretary, and Treasurer. The Chief Executive Officer shall act as an ex officio member without voting power. The Board of Directors shall be in their positions for two years. Each individual should not hold more than three consecutive terms.
ACCU has been instrumental in the promotion of credit unions in Asia. The following is the milestones of credit unions in Asia:
ACCU role has evolved since its inception in 1971 based on the development of credit union movements in Asia. The following table explains the evolution of ACCU role:
Strategic Direction: SUSTAINABLE CREDIT UNION SYSTEM IN ASIA
|E-SOLUTIONS E-learning, consulting, and business solutions|
|QUALITY ASSURANCE Branding, Benchmarking, Risk Based Supervision, Stabilization Fund, Credit Union Law, CRM|
|PROFESSIONALIZATION Systems development, policies, products & services, prudential standards, management training, Strategic Planning, Good Governance, HRM, market segmentation|
|LEADERSHIP DEVELOPMENT Formation of the National Federations (service organizations for credit union development) and training of leaders|
|MOTIVATION Credit Union Philosophy, principles and values (continuing in economies in transition)|
From 1971 to 1980, ACCU services were focused on introducing the credit union philosophy and principles to Asian countries. Annually, ACCU organized training to educate promoters of credit unions which led to the spread of credit unions in Asian countries. Except for the five founding members of ACCU (Japan, Hong Kong, Korea, Philippines and Taiwan), other federations that have become members of ACCU were formed during this period such as Bangladesh, Indonesia, Papua New Guinea, Thailand, Malaysia, Nepal, India and Sri Lanka.
The promotion of credit unions and building connections are an ongoing support for economies in transition (either from central economy or conflict) such as Cambodia, Lao PDR, Mongolia, Timor Leste, Pakistan and Vietnam.
Aimed at building human capital, ACCU offered an intensive leadership course on credit union management and Field Organizers training during 1981 to 1992. Many of those who were trained are still serving the credit union movement in their countries and internationally to some extent. Besides the ACCU sponsored training programs, cooperation among member organizations blossomed. Members of ACCU demonstrated their enthusiasm to learn from each other and share resources through exposure and internship programs between countries.
The decade is considered as the peak of business solutions development aimed to professionalize the credit union operation. In 1998, ACCU implemented the project on Institutional Development of Credit Unions in Asia (INDECUA) that raised the level of awareness of leaders on the need to professionalize the credit union operation to meet the challenges of globalization. From this project, ACCU has evolved its role from merely technical assistance provider to business solutions developer. All the solutions developed have been proven to be valuable to credit unions.
ACCU steps up to guarantee the value and differentiation of credit unions in the marketplace by developing systems of quality control. Tools such as ACCESS (stands for A1 Competitive Choice for Excellence in Service and Soundness) Branding, Risk Based Supervision, Stabilization Fund, Web-based Benchmarking Service and Governance Framework assist credit unions to raise its market performance and heighten its sense of mission.
From 2014 ACCU takes leadership to integrate the credit union networks in Asia. It would mean the federations demonstrating leadership to ensure the viability, growth and sustainability of the network. The federations provide network support in areas of finance, liquidity management, human resource, lending services, marketing, and supervision.
Integrated and Sustainable Credit Union Networks
ACCU works in partnership with its members to strengthen and promote credit unions as effective instruments of socio-economic development of the people
We owe our members a Dynamic Regional Organization. We will strive to expand our human resources by mobilizing competent people who can deliver value-added services to our members in a timely manner.
We owe our members a Leading Organization for Credit Union Innovation in Asia. ACCU will not duplicate what our members are doing. Our services will always be of value to members that use them to help achieve their own goals
We owe our members a Learning Organization for Credit Unions in Asia - this means ACCU will be the resource center or facilitator for credit union best practice, management tools, systems, guidelines and technology.
We owe our members and partners the Highest Quality Service possible at all times characterized by responsiveness, accuracy, integrity and professionalism. We will always strive for quality improvement.
We owe the Asian Credit Union Movement the value of Solidarity. This means our mechanisms, policies, and programs will translate this value.
The membership is open to national federation of credit unions/cooperatives/savings and credit cooperatives representing at least 20,000 individual members or 2% of the country's population. The membership is minimum of US$ 2,000 and maximum US$ 5,000 per year computed based on the aggregated movement's assets.
The membership is open to national organization or credit union league or federation which is not yet qualified to become a regular member. Annular due is US$ 1,500
The membership is open to organizations from both local and abroad promoting and supporting credit union development. The annual dues is US$ 1,000.
Open to any primary credit union willing to participate for international development. The membership would allow accelerated access to information, networking, cooperation among cooperatives and experience sharing at international level. The annual dues is US$ 500.
ACCU Development Partners
The General Meeting is the highest policy-making forum of the organization. It is convened by ACCU annually, with delegates representing each member credit union league or federation. The General Meeting elects five delegates to serve as the Board of Directors. Within the elected Board, they choose the President, two Vice Presidents, Secretary and Treasurer. The Board meets twice a year. A team of professional staff provides technical services and support to members. Specialised groups, such as the CEOs Advisory Committee, Task Force on Gender and Development, Future Leaders Task Force, and the Human Resource Development Committee meet in conjunction with the General Meeting to give advice on ACCU overall policy and programs and to review impacts of ACCU activities.
Rish Raj Ghimire, the Chairman of the Nepal Federation of Savings and Credit Cooperative Unions (NEFSCUN) joins the ACCU Board after he is elected as the 1st vice - president of ACCU at the Annual General Meeting held in Incheon, South Korea in September 2016.
Ghimire has been involved in the Nepal SACCOS movement for more than 25 years. Through his leadership, the integration of SACCOS is taking into shape. He is a number one supporter of ACCU programs in Nepal and making sure it is being institutionalized at the federation. He has vast experience on credit unions locally and internationally. Ghimire was elected as Alternate Board in the September 2014 General Meeting.
Mr. WU Tien-Teng, delegate as the chairman of Credit Union League of the Republic of China (CULROC), is elected as the 2nd vice chairman of ACCU. He has served himself in credit union movement for over 30 years.
Equipped with ample experience as vice chairman, director and supervisor of CULROC, he is always diligent, passionate, and dedicated himself to promoting credit union development in Taiwan.
After being elected as the CULROC chairman, Mr. WU continues to lobby with the government officers and legislators to create a better environment for Taiwan credit union movement.
His current positions include the Director of Hexing Credit Union and Commissioner of Changhua Chapter.
Dr. Somnuk is the Vice-President of Federation of Savings and Credit Cooperatives of Thailand Limited (FSCT). He dedicated and sacrificed himself in social-economic development of credit union movement. He has been working in cooperative sector for 20 years. He got a Doctorate Degree in Educational Administration from Buriram Rajabhat University. He also holds the position of the Vice-President of Surin Institute of Education Savings and Credit Cooperative Limited. His current profession is the Director of Personnel Management at Surin Primary Educational Service Area Office Π.
Atty. Gloria Futalan is the Chairperson of the Philippines Federation of Credit Cooperatives National. She is also the Chairperson of the Cooperative Bank of Negros Oriental, the Negros Oriental Copreneurs Surety Fund, and the Silliman University Cooperative. She is a Development Educator and has been actively involved in the cooperative movement for 30 years where she shares her expertise in law, finance, and management.
Atty. Futalan is the Dean of the College of Business Administration at Silliman University in Dumaguete City, Philippines and the Vice President (Visayas) of the Philippines Association of Collegiate Schools In Business. She has conducted feasibility and research studies that have strong social impact, the latest of which is the study on the "Factors Contributing to the Recovery and Continuity of Philippines Local Businesses and Residents' Resiliency in the Aftermath of Typhoon Yolanda (Haiyan)".
A practicing lawyer since 1998, her specialization includes Commercial Law, Corporate Law, Special Bank Law, and Human Rights Law. She earned her Ph.D in Education at Silliman University in the Philippines, Certificate in Public Finance at the University of Bath in England, Certificate in Public Administration at the Fiscal Administration Foundation, Inc. (FAFI), MBA at the Ateneo Graduate School of Business in the Philippines, and BBA at Silliman University.
V. Joko Susilo is the Chairman of Credit Union Central of Indonesia (CUCO) since June 2016. CUCO, also known as INKOPDIT, is the national service organization for credit unions, and a regular member of ACCU. It represents more than 2.4 million individual members from 921 credit unions throughout Indonesia with an aggregate asset of USD 1.9 billion.
Before this position, he was the Board Member of Melania Credit union and the Credit Union League of West Java Province. He holds a degree in Social Work.
Leni (her nickname) joined the Association of Asian Confederation of Credit Unions on February 1995 as Manager for Member Services responsible to assist ACCU member organizations in developing and improving their movement's institutional capacity.
She assumes greater responsibilities for the Asian credit union movement starting September 1, 2014 as she has been appointed as the new Chief Executive Officer of ACCU after the retirement of the current CEO, Ranjith Hettiarachchi.
Southeast and South Asia have been the destination of Leni's travel since 1995 where she is concentrating much in helping ACCU member organizations in reaching to the poor, professionalization, quality assurance and now integration.
She is in-charge in developing programs according to the present needs of ACCU member organizations and credit unions. As ACCU is a think tank organization for credit unions, Leni's main task is developing credit union business solutions in response to credit union current and perceived challenges. ACCU now offers 21 Credit Union business solutions for members.
As a Certified Public Accountant, she was providing external auditing service, and management advisory services to both credit unions/cooperatives and private business entities from 1990 to 1994. Leni also joined the academe for one year as a CPA Reviewer before she came to work with ACCU. She completed a certificate course on Women's Executive Leadership Program at the Center for Executive Education at the University of California Berkeley in USA in July 2014.
Leni is a graduate of the 13th Australian Development Education Workshop in the year 1997. Inspired with the DE experience, ACCU and the Credit Union Foundation Australia, started the Asian Development Education Program in 1999. The Asian DE has gained high approval from more than 600 leaders and professionals who are certified since 1999. Leni is serving as the DE Administrator for Asia and also received the I-CUDE (International Credit Union Development Educator) designation given by the World Council of Credit Unions.
Project Manager : Mr. Ranjith Hettiarachchi:Thailand Training & Development Officer : Mr. Dindo A. Meroy:Myanmar Training & Field Assistant : Mr. Ye Htun Maung Maung:Myanmar Training & Field Assistant : Mr. Aye Min Win:Myanmar Training & Field Assistant : Mr. Thazin Wai:Myanmar
project staff : Mr. Vincent Chisim:Bangladesh project staff : Mr. Romel Hubert Cruze:Bangladesh project staff : Mr. Stephanus Toga Siagian:Indonesia project staff : Mr. Durga Prasad Dhakal:Nepal project staff : Mr. Ernan Palabyab:Philippines project staff : Mr. Daisybelle M. Cabal:Philippines
project staff : Mr. Andrew So:Hong Kong project staff : Mr. Bhakter Solomon:India project staff : Mr. Fr. Fredy Rante Taruk:Indonesia project staff : Mr. Marselinus Sunardi:Indonesia project staff : Mr. Shivajee Sapkota:Nepal project staff : Ms. Emma dela Cerna:Philippines project staff : Mr. Daisybelle M. Cabal:Philippines project staff : Mr. Ernan Palabyab:Philippines project staff : Mr. Juris perez:Philippines project staff : Mr. Caroline Dave:Philippines project staff : Mr. Pattareepan Pongwat:Thailand project staff : Mr. Kruewan Chonlanai:Thailand project staff : Mr. Teresa Tao:China
Course Facilators : Mr. Albert Chong:Indonesia Course Facilators : Mr. Richard Avena:Philippines Course Facilators : Ms. Emma Sable dela Cerna:Philippines Course Facilators : Mr. Roberto Abule Estoconing:Philippines Course Facilators : Mr. Ernan Lopez Palabyab:Philippines Course Facilators : Ms. Sophie Ling-Ching Liang :Taiwan R.O.C Course Coordinator : Mr. Vivit Chareonsin:Thailand
ACCU's repertoire of Product and Services were developed to meet the needs of our members in the following areas:
Organization of strategic planning, financial management, and policy and product development; Coordinating leadership exchange programs on credit union development issues among leaders in Asia; Project identification, design and evaluation; Organizing the Asian CU Open Forum, CEOs Workshops and networking of specialized committees on gender, youth and human resources; Conducting training on micro-finance and micro-enterprise development to create a conducive environment for the entrepreneurial poor; Representation at the global credit union/cooperative forums; Strengthening interaction with governments and advocacy on policy and legislation that will protect and serve the best interests of the credit union/cooperative movement; Fund-raising for the Asia Fund for Credit Union Development (AFCUD). The fund also welcomes monetary and technical resources to support the development of any specific program area; Collecting and publishing information of interest to credit unions/cooperatives; Conducting feasibility studies and research; Developing and facilitating human resource development activities; Networking with parallel cultures
Enhancing women's democratic participation through policy advocacy and targeted training
Facilitating youth participation in credit unions by means of awareness programs and specifically designed products and services; Promoting the credit union model in the "transition economies" in the region
Consulting services for development partners;
Brokering for international lending;
Promoting ICT, software and hardware;
Technical assistance in systems development
|2001||Australia||Credit Union Foundation Australia|
|2002||Canada||Canadian Co-operative Association|
|2003||Canada||Irish League of Credit Unions|
|2005||Philippines||South East Asian Rural Social Leadership Institute|
|2013||Canada||Développement international Desjardins (DID)|
|2015||Australia||Encompass Credit Union Ltd.|
|2015||Australia||First Choice Credit Union Ltd.|
|2015||Australia||Maritime Mining Power Credit Union Ltd.|
|2015||Australia||My Credit Union Ltd.|
|2015||Australia||Fire Brigades Employees Credit Union Ltd.|
|2015||Australia||Select Credit Union Ltd.|
|2015||Australia||The Community Mutual Group|
|2015||Australia||Shire Local Banking|
|2015||Australia||WAW Credit Union Ltd.|
|2016||USA||United Nations Capital Development Fund (UNCDF)|
|1989||Indonesia||Mr. Robby Tulus|
|1990||Korea||Mr. Michael Lee-Sang Ho|
|1990||Taiwan R.O.C||Mr. Chen Wang-Shong|
|1991||Taiwan R.O.C||Mr. Mathew Wang Wu|
|1992||Thailand||Mr. Weera Namwong|
|1993||Taiwan R.O.C||Mr. Hsieh Wen-Yih|
|1994||Hong Kong||Mr. Andrew So Kwok-Wing|
|1995||Korea||Mr. John Sung-Ho Park|
|1997||Thailand||Mr. Sming Jongasikit|
|1998||Korea||Mr. Kwang-Bo Son|
|1999||Indonesia||Mr. Ibnoe Soedjono|
|2001||Thailand||Assoc. Prof. Sawat Saengbangpla|
|2002||Australia||Mr. Grahame Mehrtens|
|2003||Sri lanka||Mr. P.A. Kiriwandeniya|
|2004||Philippines||Atty. Mordino R. Cua|
|2005||Thailand||Dr. Amporn Wathanavongs|
|2007||Korea||Mr. Lee Han-woong|
|2008||Thailand||Mr. Supachai Srisupaaksorn|
|2009||Philippines||Hon. Guillermo (Posthumous)|
|2011||Philippines||Mr. Cresente “Cris” Paez, Sr.|
|2011||Korea||Mr. Augustine K. Lim|
|2013||Thailand||Dr. Chalermpol Dulsamphant|
|2015||Taiwan R.O.C||Chuang Chin-Sheng|
|2010||Nepal||Bindabasini Saving & Credit Co-operative Society Ltd.|
|2010||Philippines||Paglaum Multi-Purpose Cooperative|
|2011||Bangladesh||Baridhara Mohila Samobaya Samity Ltd.|
|2012||India||Buldana Urban Credit Co-operative Society Ltd.|
|2012||Nepal||Sahara Nepal Savings and Credit Cooperative Society Ltd.|
|2013||Nepal||Nawaprativa Saving and Credit Cooperative Society Ltd.|
|Philippines||Manatal Multi-Purpose Cooperative|
|2017||Philippines||San Jose del Monte Savings and Credit Cooperative|
|Philippines||St. Martin of Tours Credit and Development Cooperative|
|2017||Nepal||Janasachetan Saving & Credit Cooperative Society Ltd.ï¿½|
|2017||Nepal||Bindabasini Saving & Credit Co-operative Society Ltd.ï¿½|
|2017||Nepal||BudolSamudayik Saving & Credit Cooperative Society Ltd.|
|2017||Nepal||Siddhi Ganesh Saving & Credit Cooperative Society Ltd.ï¿½|
|Nepal||Samudayik Saving & Credit Cooperative Society Ltd.|
|2017||Nepal||VYCCU Saving & Credit Cooperative Society Ltd.|
|Nepal||Kisan Saving & Credit Cooperative Society Ltd.|
|2017||Nepal||Subhakamana Savings and Credit Cooperative Society Ltd|
|2017||Indonesia||Credit Union Sauan Sibarrung|
|2017||Nepal||Mahila Savings and Credit Cooperative Society Ltd.|
|2017||Nepal||Kalyankari Savings and Credit Cooperative Society Ltd|
|2017||Nepal||Hamro Janakalyan Savings and Credit Cooperative Society Ltd|
|2017||Nepal||Scope Savings and Credit Co-operative Society Ltd.|
|2017||Nepal||Kishan Kalyan Savings and Credit Cooparetive Society Ltd.|
|2017||Nepal||Upakar Savings and Credit Cooperative Society Ltd|
|2017||Nepal||Itahara Savings and Credit Cooperative Society Ltd|
|2017||Nepal||Shree Barahi Savings and Credit Cooperative Ltd.|
|2017||Nepal||Gaindakot Swabhiman Savings and Credit Cooperative Society Ltd|
|2017||Nepal||Milijuli Savings and Credit Cooperative Society Ltd|
|2017||Nepal||Manakamana Savings and Credit Cooperative Society Ltd|
A co-operative is a group of people acting together to meet the common needs and aspirations of its members, sharing ownership and making decisions democratically. Co-operatives are not about making big profits for shareholders, but creating value for customers – this is what gives co-operatives a unique character, and influences value and principle Co-operative businesses are owned and run by and for their members, whether they are customers, employees or residents. As well as giving members an equal say and share of the profits, co-operatives act together to build a better world. Co-operatives are a flexible business model. They can be set up in different ways, using different legal structures, depending on what works for the members. The definition of a co-operative business is that they are owned and run by the members - the people who benefit from the co-operative's services. Although they carry out all kinds of business, all co-operative businesses have core things in common.
Co-operatives want to trade successfully – they are businesses, not charities, after all. Members, such as farmers or freelancers, tenants or taxi drivers, can often do better by working together. And sharing the profit is a way to keep it fair and make it worthwhile. Rather than rewarding outside investors, a co-operative shares its profits amongst the members.
Co-operatives are a business model that exists to serve its members, whether they are the customers, the employees, or the local community. The members are the owners, with an equal say in what the co-operative does. As well as getting the products and services they need, members help shape the decisions their co-operative makes. Across the world co-operatives are owned by 1Billion people – and these numbers keep on growing.
This mix of self-help and mutual aid has made co-operative business an international force for good. 100 million people around the world are employed by co-operatives, whilst nearly 1 billion are members.
Self-help – we help people to help themselves
Self-responsibility – we take responsibility for, and answer to our actions
Democracy – we give our members a say in the way we run our businesses
Equality – no matter how much money a member invests in their share account, they still have one vote
Equity – we carry out our business in a way that is fair and unbiased
Solidarity – we share interests and common purposes with our members and other co-operatives.
Openness – nobody’s perfect, and we won’t hide it when we’re not
Honesty – we are honest about what we do and the way we do it
Social responsibility – we encourage people to take responsibility for their own community, and work together to improve it
Caring for others – we regularly fund charities and local community groups from the profits of our businesses.
A Credit Union is a co-operative financial institution, that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at reasonable rates, and providing other financial services to its members.
In many countries, the financial industry is dominated by commercial or government-controlled banks that help implement monetary policies set by a government agency. Credit Unions are different in that they serve the needs of individuals. Most private sector financial institutions are controlled by investors in making a profit on the services offered to user/customers. In Credit Unions, the user/customer is also the owner. All profits made on services offered belong to the membership. Member ownership contributes to the ability to operate soundly while charging affordable rates and serving people other organizations consider unprofitable.
A Savings and Credit Cooperative (SCC) is a group of people who join together to pool their savings and make loans to each other at reasonable rates of interest that cover all costs and provide for adequate sized reserves. The group also aims to educate its members on the wise use of money so they can improve their lives.
To make the process easier, the group maintains a business structure – a cooperative – which functions as an intermediary between savers and borrowers. The members of the group own and control the organization.
SCCs are organized to serve one or more groups of people who have something in common. Everyone who shares the common bond qualifies to join the SCC. They are part of its field of membership. To become a member, a person must purchase one ownership share. Each SCC should be independent and financially self sustainable with an obligation to put the best interests of its members over any other concerns.
A SCC uses its member’s shares and deposits to fund loans. So it pays savers for the use of their money. This payment is both a fair return for that use and an incentive to save more. As the pool of savings grows, more loans can be made, more income can be generated, and more members can be served.
The people who borrow from the pool pay interest for the use of the money. This interest is the SCC’s main source of income. Total income must cover the return paid to savers, the SCC’s operating expenses, and reserves for financial stability. It may also fund education programs and additional financial services. Most SCCs identify the benefits they want to offer, then set about earning the income needed to fund them.
SCCs are frequently considered as “non-profit” organizations. By definition these organizations keep only enough income to cover current operating expenses. For SCCs this strategy would amount to self-destruction. It doesn’t allow for expansion or additional benefits when the membership grows and changes. And it doesn’t allow for the losses that inevitably occur, but which are difficult to predict in advance.
What makes a SCC non-profit is that all surplus funds are returned to the members in one way or another. Most often the “return” is in the form of benefits such as lower loan rates, additional services, larger provisions against loss, or new equipment that permits better service. After a SCC has met its other goals, it may give any remaining surplus back to the members as share dividends.
A SCC is also non-profit in the sense that its purpose is to serve the members, not to make money. It needs money to provide services and benefits. In fact, it must be very careful to operate on a sound financial basis. But money is the means, not the end itself.
The first step in using money effectively is to accumulate savings for expected and unexpected demands. When something comes up, savings may cover the entire amount needed or may help the member secure financing. SCCs encourage members to save regularly, even if the amount they can set aside is small. Time and again it has been proven that even people with very little income are able to save something.
SCCs use member’s savings to make loans to members who need capital for productive purposes. SCCs pay a fair return to savers for the use of their money. The rate paid should be based on SCC costs and the market savings rates and should not be well in excess of the market rate so as not to attract additional funds for which the SCC has no use.
To protect member’s savings, SCC loans must be made on a sound basis, with very high expectations that borrowers will meet their obligations. Because the SCC mission is service, SCCs often make small loans that other organizations would dismiss as unprofitable. The SCC must be satisfied that a borrower will have enough income to make the payments and will use credit analysis to determine the borrower has the ability to repay as described in the loan contract.
The loan interest rates charged at SCCs are generally affordable; they should cover SCC costs and compare to average loan rates available at other similar financial institutions. SCC loan rates increase or decrease according to the market.
With a good understanding of financial matters, members can use their money more effectively. So education is another important part of the SCC tradition. SCCs help members understand why savings is important and how to use credit wisely. Seminars may address these or other special topics including improving wage-earning skills and credit rehabilitation.
The Hands and Globe logo has symbolic and historic significance for the Credit Union Movement. The cupped hands symbolize both the financial security and support offered by the international Credit Union network, as well as the fact that the success of the Movement is in the hands of its members.
The globe symbolize the worldwide scope of the Movement and suggests the impact that a truly united Movement can have on the financial development of all countries. The people within the globe represent the real focus of the Credit Union Movement. It is the human element - the harmony of people working for people - that distinguishes Credit Unions from other financial institutions..
Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others.
Co-operatives are voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership without gender, social, racist, political or religious discrimination.
Co-operatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives, members have equal voting rights (one member, one vote) and co-operatives at other levels are also organised in a democratic manner.
Members contribute equitably to and democratically control the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surplus for any or all of the following purposes:
Developing their co-operative possibly by setting up reserves, part of which at least would be indivisible. Benefitting members in proportion to their transactions with the co-operative. Supporting other activities approved by the membership.
Co-operatives are autonomous, self-help organisations, controlled by their members. If they enter into agreements with other organisations, including governments or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.
Co-operatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their co-operatives. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of co-operatives.
Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.
Co-operatives work for the sustainable development of their communities through policies approved by their members.