Growth Of Credit Unions Research Articles

How credit unions affect the profitability of Brazilian commercial banks?

We investigated the effects of the growth of credit unions, which by law are non-profit entities, on the return on assets and equity of Brazilian commercial banks. We also assess the impacts on commercial banks’ main revenue and expense lines. Data from 2000 to 2021 were used and dynamic panel models, System-GMM, were estimated. The results indicate that the greater the participation of credit unions, the greater the return on assets and equity of commercial banks. As for the impact on expenses, we noticed that the greater the participation of credit unions, the lower the expenses with funding by commercial banks. The results found bring a different perspective from what could be expected: the entry of a non-maximizing agent (credit unions) in a given market can reduce the profitability of the incumbent agents. Moreover, the relationship between commercial banks and credit unions can be one of complementarity and not substitutes. The results are robust for several specifications.

The Dynamic Typology in the Development Process of Credit Union Movements

The aim of this paper is to find a dynamic framework of analysis of credit union movements by grouping credit unions into different category types. Within the heterogeneous reality of the worldwide credit union movement, the typology provides a clearer understanding of the dynamics of change and development. We use panel-ordered logistic regression to find the key covariates of influence when analyzing the original typology to add further explanation of the development of credit union movements. By using transnational research, we revisit each of the three categories of the original typology to re-evaluate and expand upon the relevance of this particular model. We also include the elements of economy, society, education, and culture in other countries in this research. Our findings suggest that the stage of development of the credit union movement depends on the variables of asset scale, financial crisis, legislative framework, economy, society, and culture of the country. In addition, they indicate that the penetration rate of the credit union movement depends on the asset scale, loan ratio, credit union growth, financial crisis, economy, society, education, and culture of the country. This lends support to the recognition of the diversity of the credit unions’ development.

A comparison of bank and credit union growth around the financial crisis

PurposeThe purpose of this research is to examine the growth rates of commercial banks and credit unions around the financial crisis and recovery. Credit unions are analyzed as a group and by field of membership. Specifically, this research analyzes the growth rates of assets, deposits, and loans.Design/methodology/approachThis research employs univariate tests of differences to examine the median growth rates for commercial banks and credit unions. Unbalanced pool regressions analyze growth rates during the pre-crisis, crisis, and recovery periods, controlling for size, net charge-offs, and unemployment.FindingsUnivariate test results that control for size show that banks grow at faster rates than credit unions for most of the pre-crisis years. However, medium sized credit unions grow at faster rates for most of the crisis and recovery years. Results of unbalanced pool regressions suggest that, overall, credit unions grow at slower rates than do banks. However, during the crisis and recovery, credit union growth is significantly greater than that of banks, after controlling for net charge-offs, size, and unemployment. Credit union growth varies by field of membership type.Originality/valueAlthough a large volume of research examines commercial bank performance around the financial crisis, only a few papers assess the performance of credit unions. And very few papers compare commercial banks and credit unions. This paper explores how the recent financial crisis influenced the growth of commercial banks and credit unions from 2005 to 2013.

Does CEO Gender Matter at Financial Institutions? An Event-Study Analysis of Credit Union Data

Previous studies of risk management and overconfidence at firms and financial institutions suggest that female CEOs engage in more conservative risk management practices relative to male CEOs, and less aggressive growth and acquisition behavior. However, these studies are limited by a lack of variation in CEO gender, as only 5% of commercial bank CEOs and 6% of Fortune 500 company CEOs are female. We examine gender differences in risk management and overconfidence in the distinct context of nonprofit financial cooperatives (“credit unions”), in which a majority (52%) of CEOs are female. Do observed gender differences in risk preferences and overconfidence hold under such circumstances? We utilize a unique dataset with 23 years of credit union quarterly data and CEO gender to employ two-way quarter and institution fixed effects and event study frameworks to focus on variation within credit unions that experience a CEO transition with a corresponding change in the gender of the CEO. The event study methodology allows us to thoroughly explore pre-CEO transition trends and parallel trends to account for potential selection bias. While gender differences in indicators of risk management are in the expected direction, few are statistically significant, and none are economically meaningful. The results suggest that practical differences in observable risk management are negligible among credit union CEOs. However, we do find statistically significant and large gender differences in credit union growth: male-led credit unions grow 2.9% larger in terms of memberships and 5.9% larger in terms of loans. They also expand their fields of membership to have 8.2% more potential members, execute 2.8% more merger-acquisitions, and increase their marketing expense by 7.5% relative to female-led credit unions. Nonetheless, there are no significant gender differences in credit union earnings. We argue that the results are consistent with gender differences in overconfidence but not risk aversion. The findings highlight the importance of context when evaluating gender differences in risk management and performance.

SUSTAINABLE STRATEGIC GROWTH, SAVINGS AND CREDIT COOPERATIVE SOCIETY AND CREDIT UNION INDUSTRY: A GLOBAL OVERVIEW

Purpose: To ascertain the sustainable strategic growth Savings and Credit Cooperative Societies and Credit Unions Industry globallyMethodology: This is a secondary research based on review of existing available literature (from books, conference reports, websites and journals) in the area of Savings and Credit Cooperatives Societies and Credit Unions in various countries globally.Findings: The study found that number of Savings and Credit Cooperative Societies/Credit Unions in Africa increased by 83.3%, while that of Asia increased by 78.0% between the periods 2007 and 2016 and the average industry growth for Africa and Asia was 33.2% and 42.3% respective. The number of Credit Union growth in Caribbean (-5.6%), Europe (-23.9%), Latin America (-4.5%), North America (-32.6%) and Oceania (-32.8%) registered number of Savings and Credit Cooperative Society/Credit Union growth decline between the periods 2007 and 2016. The global aggregate growth in the number of Savings and Credit Cooperative Society/Credit Unions between 2007 and 2016 was 46.0%.Unique contribution to theory, practice and policy: Considerations for global Savings and Credit Cooperative and Credit Union growth are evaluated on the multiple dimensions of market, region diversity, technological innovation rate, and Savings and Credit Cooperative Society/Credit Union market trends. Growth is the most frequently used corporate strategy. It means increases sales, assets, net profits and a chance to take advantage of the experience curve.

Performance of Savings Groups in Mountainous Laos under Shifting Cultivation Stabilization Policy

(ProQuest: ... denotes non-US-ASCII text omitted.)I IntroductionIn the late 1990s, village savings and credit groups (hereafter savings groups, or SGs) were introduced from Northeast Thailand to Laos by NGOs-Foundation for Integrated Agricultural and Environmental Management and Community Organizations Development Institute of Thailand-with the cooperation of the Lao Women's Union (LWU), first to villages in Vientiane Municipality and later to hinterland areas where the market economy was less developed (see Ohno and Fujita, special issue introduction paper). Raiffeisen's credit unions in Germany formed the original model for credit unions later developed in other areas, including other European nations, the United States, Japan, and also Northeast Thailand. When credit unions were introduced to these other areas, the economy-even in rural areas-was already commercialized and had a favorable infrastructure, which resulted in the successful growth of credit unions. In contrast, such conditions do not exist in Laos. The rural economy of Laos is still basically subsistenceoriented and largely isolated from urban centers due to poor infrastructure.Luang Prabang Province, which consists mostly of mountainous areas, is a typical case. Until recently, villagers there depended on cultivation under a village-level communal land management system, with staple food (rice) being produced for selfconsumption. Non-rice foods, such as various kinds of vegetables, were collected from the surrounding natural environment. Wild animals and fish were obtained through hunting and catching. Sales of livestock and non-timber products largely met the area's cash needs, and rural livelihoods remained basically in a state of self-sufficiency.1)However, in recent years the situation has gradually changed due to the growing population and increased cash needs among inhabitants, which have put pressure on natural resources. At the First National Forestry Conference, held in 1989, deforestation was officially identified as a major problem threatening the sustainability and stability of natural resource management in Laos (Khamphay and Phouthone 2009). Besides illegal logging, cultivation was identified as a major cause of deforestation. After the conference, a national program for shifting cultivation stabilization, land use planning and land was launched in 1990 and implemented on a trial basis in Luang Prabang and Sayabouly Provinces. Finally, the Seventh Party Congress in 1994 set a policy target to stabilize cultivation by 2005 with complete eradication by 2010, and donors and international organizations provided financial and technical support for implementing the policy in northern Laos (Takahashi and Liang 2010).2)The land use planning (LUP) program aimed at imposing restrictions on villagers' customary land use rights by introducing land use categories such as protection forest and conservation forest. Villagers were allowed to continue cultivation only in specific land categories. After a while, the land allocation (LA) program was introduced and three to five plots of land were equally allocated to every household. When villagers signed the Land Use Agreement,3) they were issued a Temporary Land Use Certificate (TLUC)4) for certifying ownership rights. They were prohibited from cultivating other lands. This implied de facto an introduction of a private landownership system in rural Laos. Villagers traditionally dependent on cultivation in communal land had to abandon it and start permanent upland cultivation. A policy of resettlement of highland people to lowland areas was also incorporated in this LUP/LA program.5)Under such a forced commercialization of livelihood in a short period of time, a critical question is: how did people adapt to the new policy and institutional environment in general, and how could they earn sufficient cash income to purchase rice and other necessities in particular, since it appears to have been difficult to produce enough rice only in the allocated upland fields? …

The Financial System in Barbados 50 Years after Independence

The financial system plays a crucial role in transferring funds from savers to investors and consumers, facilitating payments and allowing individuals and institutions to manage a range of financial risks. Imagine life in Barbados as a family with no access to consumer credit or a home mortgage. Imagine operating a business without access to financing. Imagine the limits in the services which government could provide if it was limited to the amount and timing of tax revenues. Imagine the vulnerability of families and institutions if there was no life, fire or motor insurance, or if there was no National Insurance Scheme. In fact, some would argue that the financial system is one of the unsung heroes of the high quality of life we enjoy in Barbados, as we approach 50 years of independence. As the end of 2015 approaches, and the year 2016 and 50 years of independence beckons, Barbados boasts a modern, sophisticated and well-regulated financial system. At independence in 1966, commercial banks from Canada and the United Kingdom dominated the financial landscape, alongside the locally owned Mutual Assurance Company. 50 years later, the financial system is still dominated by commercial banks, and Barbados possesses what is often termed a “Bank based” financial system. However, the banking system is now regulated by a local central bank, banks from the United Kingdom have disappeared, and Canadian and Trinidadian owned banks dominate the landscape. Alongside the commercial banks, there is an emerging non-bank financial sector where the Mutual Assurance Company has morphed into a global financial corporation together with international and regional Insurance companies. Credit Unions are now major players; Finance Houses provide a range of modern sophisticated retail financial services; there is a thriving mutual fund industry and the National Insurance Scheme is the largest domestic financial institution. The emergence and importance of the roles played by the Barbados Central Bank and Financial Services Commission, the emergence and growth of Credit unions and the National Insurance Scheme, and the emergence of the Barbados Stock Exchange and Mutual Funds are probably the most significant developments in the financial services sector since independence in 1966. Over the next 50 years I expect the major developments in the financial system to be, a greater variety of corporate debt instruments, venture capital investments, greater use of online services and an increase in personal financial planning services.

A dynamic theory of the credit union

A topic of recent interest in the retail financial sector has been the growth of credit unions or “pure cooperatives”. Past credit union researchers built mathematical models of credit union operations. These models identified important operating characteristics but were modeled under assumptions of static operating environments. The model presented in this paper departs from the traditional static models and examines dynamic operation for a United States credit union. Its inter-temporal structure clarifies a number of issues—such as optimal equity retention and inter-temporal rate policy—not addressed by earlier studies. Given initial conditions, the model specifies equity retention and inter-temporal deposit and loan rate policies until an equilibrium state is reached.

The Credit Crunch – Are credit unions able to ride out the storm?

Credit unions are financial co-operatives that conduct their business for their members. The principal purpose of a credit union is to receive deposits from and make loans to members. They do not serve the general public. Membership is restricted by a qualification that is referred to as a common bond or field of membership. The origins of credit unions are to be found at the heart of the Industrial Revolution, when Robert Owen established two famous co-operatives in Rochdale and New Lanark. The most prominent co-operative influenced by his ideas, the Rochdale Society of Equitable Pioneers, opened their famous co-operative shop on Toad Lane in 1844. This was an important step in the social and political change that was taking place throughout Europe and of which the people of Rochdale can justifiably claim to be leaders. By 1848, the Co-operative had 140 members and the society's membership increased to 390, by 1880 the national membership of consumer societies had reached over 500 000, and by the turn of the century it had reached 1.5 million. The members of the two co-operatives subscribed to shares and paid small amounts to raise sufficient funds in order to purchase goods below the market value and then resell them to the members at a savings. These co-operatives were the result of the ‘growing complexities of modern economic life for both farmers and workers’. Importantly, the Rochdale Society of Equitable Pioneers developed a number of principles that have assisted the development of credit unions. These principles were open membership, the democratic control of the organisation, a limited interest on share capital and the return on member's interests being in proportion to the member's patronage. These principles illustrate why credit unions are a unique financial co-operative. Under the guidance of the World Council of Credit Unions, the growth of credit unions has been remarkable. In 2007, there were 49 000 credit unions and 177 000 000 members in 96 countries. The aim of this article is twofold. First, it aims to illustrate how credit unions are able to grow in times of economic hardship – a situation that is demonstrated by examining the impact of the ‘Great Depression’ in the United States of America (USA) and the ‘Credit Crunch’ in the United Kingdom (UK). Second, the article highlights the importance of deposit protection schemes when credit unions face financial difficulties in the USA, UK and the Republic of Ireland (Ireland).

The funding of credit unions – where has all the money gone?

The aim of this article is to critically assess the impact of government funding upon the growth of credit unions in the United Kingdom (UK) in light of the unprecedented level of financial support provided by the Labour government since 1997. The article begins by defining a credit union and commenting upon their importance towards the reduction of financial exclusion. The article challenges the findings of several studies that have determined that external funding has limited the development of credit unions. This is illustrated by the use of four case studies.

Credit Union Legislative Frameworks in the United States of America and the United Kingdom – A Flexible Friend or a Step Towards the Dark Side?

This article questions the findings of several studies which have concluded that the Credit Unions Act 1979 was a factor limiting the growth of credit unions in the United Kingdom (UK). The author’s conclusions are based upon an analysis of the amendments to the Credit Unions Act 1979 introduced by the Financial Services Authority (FSA). As a result, the 1979 Act now reciprocates the controversial, yet flexible United States (US) legislative framework. In particular, the article examines the interpretation of the common bond, the provision of financial services and the regulation of credit unions. The article concludes that these three statutory provisions have assisted the growth of credit unions in both countries and not limited their development. However, the growth of credit unions has come, at the expense of their unique status and philosophy. It has made US credit unions, in particular, indistinguishable from banks. This is a problem which may affect credit unions in the UK. The article concludes that the Credit Unions Act 1979 did not limit their development, but acted as a galvanising factor for credit union expansion.

US Credit Unions: An Empirical Investigation of Size, Age and Growth

Abstract**: An econometric analysis of the growth performance of US credit unions for the period 1992–2001 investigates empirical relationships between size, age and growth. Ceteris paribus larger credit unions grew faster than smaller unions. State credit unions grew faster than federal credit unions, and single bond credit unions grew faster than multiple bond credit unions. The size‐growth gradients were generally steeper for state than for federal credit unions, and for single bond than for multiple bond credit unions. These patterns are attributed to variations in legislation and regulatory treatment. There is some evidence that younger credit unions tended to outgrow older ones. This seems consistent with a life cycle typology of credit union growth and development. There is also evidence of a positive persistence of growth effect. The cross‐sectional variance of growth is inversely related to size, but is largely independent of age.

The regulation of credit unions: A comparative analysis between the USA and Great Britain

The aim of this paper is to illustrate the importance of an effective financial regulatory agency towards the growth of credit unions. The paper concentrates on regulatory bodies in the USA and Great Britain. The author highlights three regulatory features that have assisted the growth of credit unions in the aforementioned jurisdictions. First, the interpretation of the common bond. Secondly, membership of a credit union compensation scheme. Finally, the rationalisation of credit unions.

The growth of US credit unions

The growth of US credit unions during the 1990s is investigated empirically, using univariate and multivariate cross sectional and panel estimation techniques. Univariate tests of the law of proportionate effect suggest that in general large credit unions grew faster than their smaller counterparts. On average credit unions with above-average growth in one period tended to experience below-average growth in the next. Smaller credit unions tended to have more variable growth than large ones. While credit unions share a common co-operative philosophy, they differ in terms of age profile, scope for membership growth, charter type and financial structure and performance. In estimations of a multivariate growth model, most of these characteristics are found to have a significant influence on the size-growth relationship. While large state chartered credit unions grew faster than their smaller counterparts, the reverse was true for federally chartered credit unions. In general, if larger credit unions grew faster than smaller ones, they tended to do so for specific reasons: because their charters were less restrictive, because they were more efficient, or because they had a financial structure that was more conducive to growth. Therefore credit union growth was not `random', but highly systematic.

Developing Market Driven Strategies for Credit Union Growth and Survival

Developing Market Driven Strategies for Credit Union Growth and Survival

Developing market driven strategies for credit union growth and survival

Developing market driven strategies for credit union growth and survival

The Australian Credit Union System: A Search for Excellence

This article comments on the present growth of credit unions in Australia and their prospects for the future.

Growth of Credit Unions

Growth of Credit Unions