International Credit Union Movement
– Origin –
In 1849, Mr. Friedrich Wilhelm Raiffeisen, a township mayor in the south of Germany, where was at the beginning of the industry development with the widening poverty gap, understood the farmer and people in low-incoming who were difficult for living and suffered the loan sharking in the society with uneven distribution of wealth to found a credit society; but it was failed due to depend on the charity of wealthy men for its support. Raiffeisen found out a code of social movement is “the best way to solve the problems in the society and economy which people meet is to let them help themselves”, and organized a new credit union along principles that are still fundamental today.
– history –
In 1900, the credit union concept crossed the Atlantic to Levis, Quebec, where Mr. Alphonse Desjardins, a court reporter, became aware of the outrageous interest being charged by loan sharks, organized the first credit union (Caisse Populaire) to provide relief to the working class with the support of the congressman and officers. Desjardins as a catholic set up the trial credit unions in the church with Father’s support and had a successful result; since then, credit union movement in Canada has been expanded from Quebec to all over the country; now, and the membership is about one-third of the Canadian population.
The success of the credit union movement in Canada influenced Mr. Edward A. Filene, a Jewish merchant in Boston concerned about the working class people suffering the loan sharking in the states to form the first credit union with Desjardins’ assistance in 1909. In 1921, Filene created the Credit Union National Extension Bureau, to work towards establishing effective credit union laws in all states and at the federal level. He poured more than $1 million of his own money into the project, and hired a Massachusetts attorney, Roy F. Bergengren, to support the Bureau’s efforts. The credit union movement has been spread successfully over the world in over decades by Filene and Bergengren’s effort.
– Present –
Since the beginning of credit union movement in Germany, it has been 150-year history; there are national leagues, regional confederations and the global organization- World Council of Credit Unions, Inc, WOCCU in the world. The main task of WOCCU is to provide the necessary assistance to members for sustaining the credit unions development well. For connecting with the cooperative movement, WOCCU joined the International Cooperative Alliance, ICA in March, 1977 to provide the services in 97 countries with 46,377 credit unions and 172,010,203 members as the end of 2006.
The Credit Union Difference
A credit union is a mutual cooperative organization, owned and controlled by the members who save together, lend to each other and get other financial services at a fair and reasonable rate of interest to aim to improve the lives and welfare of the members and the community development as well. Credit unions are not-for-profit, serve groups that share a common bond, such as where they work, live or go to church, and exist to provide a safe and convenient place for members.
Credit Unions are uniquely different from for-profit financial institutions and offer their members special advantages:
– a. Saving money as the shares is one of the obligation of members –
The one of businesses of credit unions is lending money to members, and the fund resource is from members keeping saving as shares which raise members saving habits to increase their own credits, and have credit unions development well with the abundance resources of capital.
– b. Democratic operation –
Credit unions are democratic, members owned cooperatives, which elections are based on a one-member, one-vote structure to elect the board members and supervisory members.
-c. Volunteer leadership-
Credit unions are led by a board of directors elected from the membership at the annual meeting; the leaders in the credit unions are volunteer and not compensated.
– d. Cooperative education advocacy –
Credit unions operate with the common ideal and democracy to meet the members’ multiple needs; in order to provide the better and efficient services to members, the leaders and employees need to have every kind of professional educations in frequency. Credit unions also conduct a series of members’ education programs to have members involved and the capabilities to evaluate the credit unions and leaders’ performance.
– e. Insurance protection –
To participate the insurance programs which run by league such as Life Saving insurance, Loan Protection insurance, Blanket Bond insurance and so on is the biggest difference with other financial institutions. It is members’ service add but also secure the finance of credit unions.
-f. Attention on both human rights and credit-
The loan products without any secured provided by credit unions help numerous members family and careers achievement; the spirit of credit unions is human development with the concept of people helping people. According to Raiffeisen’s idea, the human capital should be more important than the fund characteristic in the credit unions, so, credit unions are a cooperative that based on members’ credit and honesty.