Credit unions set for global growth
CUNA Mutual Group has indicated that many of the world credit union systems are well positioned for potential sustainable growth in the future.
Key statistics from the World Union of Credit Unions also reports that, despite a global recession, international credit union membership grew by 17% between 2005 and 2009.
CUNA Mutual Group attributes the continuing growth of the credit union movement to several factors, including an increasing consumer desire to use mutuals and co-operatives. This was given a further injection by the banking crisis two years ago.
Paul Walsh, CEO of CUNA Mutual Europe, commented; "High street banks are increasingly withdrawing from localism to reduce costs; and in many cases they are closing down branches and pushing customers to online services. As mutual lenders and credit unions offer a more personalised, local service, they are becoming even more favoured and loved by consumers."
The World Council of Credit Unions official statistics show that over the past five years, all regions in which credit unions operate have experienced positive membership growth. It is the Caribbean, Africa and Europe who are seeing the greatest increases in membership of 76%, 63% and 27% respectively. In Britain, credit union membership has increased by 57% and assets have grown by over 37% from 2005-9. Credit Unions in Britain increased the loans they advanced by 26% over that period, whilst traditional lenders curtailed consumer loans post the 2007/2008 downturn.
Paul added; "In this current economic climate, consumers need to borrow but banks have reduced their consumer loans. Credit Unions have capital and are able to continue lending, which can only be good news for the growth of the market.
In Britain, with the strong leadership of the Association of British Credit Unions (ABCUL) we are confident that the forthcoming Legislative Reform Order (LRO), government investment and continued membership expansion positions the country's Credit Unions well for sustained growth."
Adding further momentum to the UK Credit Unions, the government recently pledged £73m to support credit unions over the next four years, as a result of the continued work of ABCUL.
Paul concluded: "The combined mutual sector here in Britain, consisting of credit unions, building societies and the co-operatives, have a central role in the future of our financial sectors and the growth of the credit union movement in the UK suggests a strong future for the country's mutual sector."
This article appeared in Business Money News on 26th July 2011.