Credit Union Managers Research Articles

Resilience of cooperatives during global pandemics – Short-term effects of Covid-19 on lending behaviour of British credit unions

Cooperative financial institutions are believed to be less vulnerable to business and economic fluctuations linked to recessions and crises. This paper examines the short-term effects of Covid-19 on the British credit union sector drawing on survey data for 58 credit unions and follow-up interviews with 21 credit union managers. Loan demand, and the volume and value of loans were significantly lower in March and April 2020 after the introduction of government restrictions than in March and April 2019. Bad debt provisioning was also significantly higher in April 2020 than in April 2019. There was no significant difference for loan interest income between April 2019 and April 2020. The findings suggest that credit unions were affected by the pandemic in the same way as other financial institutions. For the majority of the credit unions, the decline in lending may be explained by a drop in consumer demand rather than restrictions put on the supply of credit. It is too early to conclude if the adverse economic conditions caused by Covid-19 will negatively affect the sustainability and ability of the sector to generate surpluses or if the cooperative model will shield the sector from resulting economic fluctuations, as suggested by the literature.

Internal Controls and Credit Risk Among Commercial Banks Listed in Nairobi Securities Exchange, Kenya

Inappropriate credit policies, as well as inadequate, limited institutional capacity by Kenya's financial sector, led to several of the banking institutions collapsing over what was termed as poor management of credit risks which resulted to increased amounts of loans that were not being serviced. The main aim of the research project was to establish the effects of internal controls on credit risk among the banks listed in NSE. The distinctive goals included to find out the influence of internal control, assessing risk ,activities in control and monitoring among banking organizations listed in NSE. The study was guided by capital asset pricing model, agency theory and modern portfolio theory. The study adopted a casual descriptive research design. The target population encompassed the eleven listed banks in Nairobi Securities Exchange where cencus was done. Both primary and secondary data were collected. The questionnaires were applied to gather data. The diagnostic tests include multicollinearity and normality. Data was evaluated using both descriptive and inferential statistics using SPSS. The findings show that there is a positive and significant link between monitoring and credit risk. The study found that assessment of the risk has a significant way on credit risk and that internal controls that are not strong such as poor ethical values have stimulated the involvement to fraud that leads to income loss and misuse of the income received. The study concluded that risk assessment P=.000 < 0.05, control activities P=.000 < 0.05, monitoring and control environment P=.001 < 0.05 have a significant effect on credit risk among commercial banks listed in NSE. The study recommends that banks should implement proper risk assessment to guide their operations and also implement efficient control activities to guide their operations. Further, the study recommends that banks’ monitoring approaches should be guided towards effective tasks and achieving the goals of the organization. In regard to propositions for more studies, this investigation could be further advanced by looking at the effect on credit risk management in other institutions such as investment banks and microfinances. It will help in the management of credit unions, Savings and Loans Associations, investment banks and microfinances in Kenya.

APONTAMENTOS DA AUDITORIA INTERNA E DE COMPLIANCE EM UMA COOPERATIVA DE CRÉDITO E SEUS REFLEXOS NA QUALIFICAÇÃO DOS CONTROLES INTERNOS

Este estudo objetiva analisar como podem ser qualificados os controles internos de uma cooperativa de crédito a partir dos apontamentos da auditoria interna e de compliance. Utilizou-se da pesquisa descritiva, estudo de caso e documental, de abordagem qualitativa. Os dados foram coletados com a observação in loco, análise documental e entrevista não estruturada, com gestores e auditores internos de cooperativas de créditos. verificou-se nos relatórios, a realização de apontamentos de conformidade ou não das atividades da cooperativa em relação às exigências. Foram constatadas falhas e pendências a regularizar, sendo que a auditoria interna pontuou as inconformidades de acordo com os controles utilizados, elencando pontuações por escalas de risco, entre baixa e alta. Nota-se melhorias ao comparar a situação atual da cooperativa com o primeiro relatório da auditoria analisado, percebe-se evolução quanto aos aprimoramentos e desenvolvimento dos mecanismos de controles internos, implicando em maior solidez e confiabilidade para a organização objeto de estudo.DOI: 10.21714/2178-8030gep.v.21.6227

ГЛОБАЛЬНІ ТЕНДЕНЦІЇ РОЗВИТКУ КРЕДИТНИХ СПІЛОК

The article presents the results of a study aimed at identifying global trends in the development of credit unions. Recommendations were also given on the management of credit unions in Ukraine in the light of trends identified. Cross-regional features of credit unions in the global dimension have been identified. Those FinTech tools that promote the development of these financial intermediaries have been identified. The activity of credit unions in Ukraine is analyzed and the specifics of their development are determined. In the article it is proved that in the near future the market of credit unions will continue to grow and today there are no prerequisites for its rapid decline, at the same time, the management of credit unions must take into account the likelihood of a new financial crisis. The article will be of interest to credit union managers, financial market regulators, and academics with relevant scientific interest

Technical efficiency: the pathway to credit union cost efficiency in Ghana

PurposeThe purpose of this paper is to investigate the factors that tend to influence credit union efficiency, specifically examining cost efficiency (CE) and technical efficiency.Design/methodology/approachUsing a two-stage method, the authors first estimate CE using Tones’ SBM data envelopment analysis method and technical efficiency in a variable returns to scale setting during the period 2008–2014. The authors estimate a mixed-effects and two-limit Tobit regression to examine the effect of credit union specific characteristics, banking industry and macroeconomic conditions, on efficiency.FindingsCredit unions’ CE averaged 38.9 percent compared to 54.4 percent for technical efficiency. The authors find that technical efficiency does not translate into CE and vice versa.Practical implicationsThe authors suggest that when targeting CE, credit union managers would have to make technical efficiency a priority. A monopolized and inefficient banking sector does not challenge efficiency improvement in the credit unions industry.Originality/valueThis study employs data from a frontier market.

A Balanced Scorecard Execution: A Key to Success for A Sustainable Credit Union

The purpose of this essay is to explore and apply the wealth of the Balanced Scorecard framework in the management of credit unions. The effectiveness of this framework has contributed greatly to the business world. The cross functional paradigm in the Balanced Scorecard concept enables stakeholders to review various business activities in a holistic manner. A qualitative approach is used to explore concepts and their applications in business. This study offers a roadmap for credit unions to implement the Balanced Scorecard framework in the context of performance management.

Firm Specific, Financial Development and Macroeconomic Determinants of Credit Union Lending

AbstractCredit unions are set up to provide financial services, especially loans to members in a cooperative setting. The increasing competition from banking and non‐banking financial institutions implies credit unions must provide financial products and services with a clear understanding of factors that interact in this competitive industry. This paper evaluates the discretional and non‐discretional factors that tend to influence loans credit unions grant their members. From fixed effect model estimate, discretional factors such as size, profitability, management quality and solvency positively associate with credit union loan business whiles loan loss, net worth, non‐loan income and non‐loan activities associate negatively. Contractionary monetary policy creates an increase in loan demand in the credit union. Credit union managers should monitor developments taking place in the loanable funds market as increasing overhead cost of banks may imply a possible increase in loan demand leading to diseconomies of scale. Copyright © 2018 John Wiley & Sons, Ltd.

CREDIT UNION SEBAGAI GERAKAN SOSIAL

As a social movement, Credit Unions (CU) display the social, economic and
 cultural strength of little people. In line with contemporary developments and the
 advance of modern technology, the management of CUs needs to be monitored,
 evaluated and adapted to the social, economic and political situation that is
 continually changing. Nevertheless, in the midst of change the values of the CU
 are perennial and are very much needed in the movement. After looking at the
 founding and development, strengthens and weaknesses of the CU, this essay
 advances concrete steps for handling them.
 
 <b>Kata-kata kunci:</b> CU, gerakan sosial, kesejahteraan, pembudayaan
 nilai-nilai, keadilan, kearifan, keberanian, kejujuran dan tanggungjawab,
 tantangan-tantangan CU.

Measuring the comparative performance of branches of a credit union for internal benchmarking

PurposeThe purpose of this paper is to identify the efficiency scores of branches and districts, the sources of inefficiency for branches and projections of variables for inefficient branches. It measures the comparative performance of branches of a credit union for internal benchmarking.Design/methodology/approachThe paper measures the performance of 35 branches of a credit union in the USA and suggests managerial insights. Data envelopment analysis is used for measuring the relative performance of the branches and districts of the credit union. The paper also compares performance differences among the districts using non-parametric statistical analyses.FindingsParts of the findings indicated that branches should focus on cost containment by reducing operating expenses and increasing their loan balances. In addition, districts were operated in different market conditions, which were evidenced by scale efficiency. The major contributions of the study are filling the void of benchmarking studies at a branch level in the credit union sector, suggesting a framework for internal benchmarking, and providing practical insights to managers of credit unions. The framework of this study can be applied to similar financial institutions with minor revisions.Research limitations/implicationsThe limitation of this study is found in the use of cross-sectional data, which is mainly due to the sensitivity of information disclosure of the credit union.Practical implicationsThe paper includes implications for the development of benchmarking studies at a branch level in the credit union sector.Originality/valueThis paper fulfills an identified need to study how to identify source of inefficiencies so as to further improve the efficiency of branches.

An application of the knowledge management maturity model: the case of credit unions

The purpose of this study is to investigate the level of knowledge management (KM) maturity of credit unions. The application of a maturity model to 15 credit unions in North America revealed that an overall level of KM maturity is at an early stage of development, but there are signs of future improvement. Credit unions operate in a highly competitive, knowledge-intensive financial industry and experience various pressures to increase their efficiency, which they can achieve through the implementation of KM solutions. Despite the absence of official KM strategies, KM projects were introduced locally in order to fill particular knowledge gaps. The availability of IT infrastructure and the implementation of KM-related technologies alone are insufficient to ensure universal success of organizational KM activities. Credit union managers periodically access and use academic research in their decision making. At the same time, they prefer accessing scholarly knowledge in translated form from books, practitioner magazines, and consultants. It was concluded that organizations competing in the knowledge-intensive sector have an inner need for KM solutions.

Cooperativas de Crédito Brasileiras Adotam Monitoramento Internacional de Desempenho?

Purpose: The study examined if the Brazilian credit unions use the 'PEARLS' performance monitoring methodology proposed by the World Council of Credit Unions, and the perception of the analysts of the cooperative system on the relevance of the indicators of this system.Methods: We used qualitative research with a sample selected through accessibility. Data were obtained from structured interviews conducted with five analysts of Brazil's Central Bank and two managers of central credit cooperatives, in addition to response, via questionnaire, of seventeen managers of credit unions located in the northern, northeast, south and southeast regions of Brazil.Results: Most of the individual cooperatives and the two central credit unions analyzed were unaware of the PEARLS methodology. This monitoring system is known only by the analysts of the Central Bank of Brazil, indicating that only the supervisory agent of cooperatives in Brazil knows the internationally proposed system and the adapted version proposed to Brazilian reality.Limitations: The survey via questionnaires obtained only 1,4% of population response rate, and the results can not be generalized.Practical implications: It can be said that there is room for improving performance monitoring techniques, as the PEARLS is used in 97 countries and unknown both by individual cooperatives and credit central cooperatives surveyed in this study.Originality: It is noteworthy that studies of this problem applied to the Brazilian reality were not found to date.

SISTEM INFORMASI SIMPAN PINJAM KOPERASI PEGAWAI PADA SMK YUPPENTEK 1 TANGERANG

Management of credit unions in SMK Yuppentek 1 Tangerang, still using the book and Microsoft Excel. This method is less effective for transactions occurring savings and loans so that the higher the count is also growing.besides activities of saving and borrowing data backup process is not automatically and inadequate storage placeso that the accumulation of papers.Given these problems, it needs to use cooperative savings andloan applications that can assist in the process of data processing and accounting of savings and loans. The research method used in this research literature, interviews, observation, analysis system, design system, and implementation system. The expected outcome of this research is with using database MySql.

CREDIT UNIONS’ ACTIVITY AND FACTORS DETERMINING THE CHOICE OF THEM IN LITHUANIA

Abstract. In the recent years, the role of credit unions in the financial sector of Lithuania has gradually become more significant. The number of credit unions grew together with their assets, number of members, and deposits. The beginning of a rapid process of credit unions’ establishment and development caused unmeasured risks which led to a suspended activity of several credit unions in 2013. This caused an insignificant migration of credit unions’ shareholders (members) from one union to another, retirements, etc. Although residents haven’t lost the confidence, this fact demands to investigate and analyse the factors determining the choice of a credit union. After a survey of credit union members in Lithuania, the factors most significant for shareholders were determined. Also, the factors least significant for the choice of a credit union were determined, and conclusions and recommendations for managers of credit unions were given. Conclusions and recommendations can help the management to choose the strategy which would result in a higher level of new members’ involvement in the union.Key words: credit union, credit union members, credit union performance, factor analysis, criteria of choice

Invidious Competition Or Benevolence: Does Not-For-Profit Status Constrain The Behavior Of Credit Unions?

If one assumes that individuals who work in nonprofit institutions are no better or worse than others and hence operate in their own interest, an organization can be kept on track and be effective only if the incentives given to individuals in the ordinary performance of their duties reflect the original intent of the organization. Sponsors of not-for-profit institutions must take the time and make an effort to hold administrators to an objective function incorporating such goals.A model is presented describing two conflicts facing the managers of credit unions. Providing higher rates to large savers could lower cost and expand deposits but does not particularly conform with the democratic intent of credit union founders. Excluding the less creditworthy in favor of higher returns elsewhere will generate more revenue but also seems inconsistent with the original normative goals of credit unions.A data set for approximately 15,000 credit unions in 1985 is used to measure credit union behavior by size and type. It is argued here that the common bond under which a particular credit union operates acts as a constraint but not a brake on bureaucratic expansionary behavior.

A Comparison of CEO and Director Perceptions of Board Involvement in Strategy

The assessment of board involvement in the strategic management process relies on data from CEOs and board members, and empirical studies assess board activity by either combining the ratings of CEOs and directors or by sampling one group of respondents only. This research note reports on discrepancies found between CEO and director perceptions of board involvement in the strategic management of credit unions. Consensus scores measure the dispersion of opinion, and the scores are compared to outcome measures using stepwise TOBIT analysis, which is rarely used in management research but is appropriate for studies with clustering of dependent variables. Findings reveal that the level of agreement about the board's involvement in mission statement development is associated with board member satisfaction. However, increases in the level of agreement about the board's involvement in monitoring strategy implementation are found in organizations that have less favorable financial soundness ratings.

Lending procedures and the viability‐social objectives conflict in credit unions

Sound lending procedures in retail financial institutions involve identifying high‐risk applicants, modifying loan conditions such as security requirements, and monitoring repayments post‐loan approval. For managers of credit unions, this procedure is complicated by the need to achieve balance between the institution’s social objective of improving loan accessibility so members can attain lifestyle goals and the possibility of reducing the institution’s viability through loan default. The results of our survey of Australian credit unions, in which 70 per cent of respondents reported experiencing some bankruptcy‐related default on personal loans, indicate managers do not impose more stringent lending conditions on high‐risk borrowers. However, social and viability objectives could be better balanced through careful loan monitoring and timely arrears practices.

Employee evaluations of service quality at banks and credit unions

Service quality in the USA has become a frustrating and unsatisfying experience. Recent indicators suggest customer satisfaction with service has been steadily declining. The financial services sector is no exception. Existing research indicates credit union customers are more satisfied with service quality than bank customers. Current studies also suggest service quality and employee satisfaction are linked to customer satisfaction. Surveys were administered to bank and credit union employees about service quality they receive from their managers. The results did not support the study’s hypothesis that credit union managers would receive higher scores than bank managers. However, the results and implications are important for researchers and practitioners interested in improving service quality at banks and credit unions.

Wages and Risk-Taking in Occupational Credit Unions: Theory and Evidence

Most occupational credit unions serve (in part) as a means for corporate sponsors to deliver tax-favored benefits to their employees. Credit union managers administer this transfer of benefits, but their performance is difficult to measure, particularly in larger credit unions. In this article, the authors develop a model of efficiency wages and optimal risk-taking and then provide empirical evidence from a large sample of occupational credit unions.

The business ethics of credit union managers: Conflicts, practices and beliefs

The business ethics of credit union managers: Conflicts, practices and beliefs

The Business Ethics of Credit Union Managers: Conflicts, Practices and Beliefs

ABSTRACT This paper analyzes responses to a recent survey of credit union managers who were asked to provide their views of ethical conflicts and practices within their industry. Results indicate that more than half of credit union managers (60%) have some ethical conflict with their individual customers, and (55%) said that there are “a few” industry practices that they considered unethical. “Misleading advertising” and “honesty in internal communications among coworkers” are the situations that most often generate ethical conflicts. About one third of respondents felt that ethical standards in the credit union profession are lower today compared with those 10 years ago, while another third perceived they are higher. Finally, more than half of respondents (58%) said their institutions have formalized rules and standards. Conclusions and implications are outlined and future research needs are described.