From Tackling Poverty to Achieving Financial Inclusion, the Transformation of The British Credit Union Movement, 1998-2008

Abstract

At the launch of the research report 'Towards sustainable credit union development (Jones 1999) on 8th December 1998, the Chief Registrar of Friendly Societies, Geoffrey Fitchew CMG, argued that not only had the report aroused strong interest in Westminster and Whitehall, but that it would act as a significant for change within the British credit union movement (Fitchew 1999). For despite the rapid expansion from the mid-1980s onwards of the number of credit unions established in low-income communities, by the end of the 1990s the growth in membership in these credit unions had stalled. Even with local government support and the commitment of local volunteers, most community credit unions, particular1y in England and Wales, were unable to attract more than a few hundred members. The result was that only four were recognised as self-sufficient and economically viable according to criteria utilised by the Birmingham Credit Union Development Agency at the time (Jones 1999, pp 24-25). In fact, it would not be inaccurate to say that many credit union activists assumed that community credit unions would always be small local organisations, staffed entirely by volunteers. Indeed, the fact that they only served a few hundred members was often seen as a strength, as it generated a strong sense of community identity and of security in the knowledge that the credit union was manageable at a local level. Yet, for others, the need for change was beginning to surface. They were increasingly concerned that credit unions were reaching only a small proportion of the people on low incomes or in poverty who had little or no choice but to use high-cost alternative financial providers. For them, credit unions were failing to realise the potential they had of making a significant contribution to the economic regeneration of communities. Yet, even for people who recognised the need to change, how credit unions might develop remained unclear and problematic. The importance of the 1999 report' was that it revealed, for the first time, the organisational and economic reality of the credit union movement, and indicated a way forward for the sector. It was for this reason that Fitchew described the report as a catalyst for change; for not only did it question the assumptions that underpinned the beliefs and actions of many credit union activists, it offered a plan of action to stimulate and enable the transformation of the movement Subsequently, the report was recognised by Government and the credit union sector as a whole as a key driver for credit union change and development (HM Treasury 1999, Local Government Association 1999, 2001; ABCUL2000, 2007; Donnelly 2004, McKillop and Wilson 2003; O'ConneIl2005; Goth, McKillop, and Ferguson 2006; CRC 2007; Collard 2007). The report was the original, seminal work which formed a theoretical grounding for all the author's subsequent research and research publications.