A credit union is a financial co-operative which provides savings, loans and a range of services to its members.
Credit unions are owned by the people who use their services, and not by external shareholders or investors. When someone joins a credit union, they become a member and a shareholder, so when the credit union is successful, it shares this success with its members in the form of an annual dividend.
The modern cooperative movement was founded in Lancashire by the ‘Rochdale Pioneers’ in 1844. Workers in the Rochdale cotton mills faced miserable working conditions, low wages and could barely afford the high prices of food and provisions. A group of weavers, who became known as the Rochdale Pioneers, pooled their scarce resources to purchase basic goods to sell to fellow mill workers at lower prices. Every ‘customer’ became a ‘member’ and had a democratic say in the business. Any surplus was used to benefit the community, or shared equally amongst the members.
In 1864 Friedrich Raiffeisen established the first credit union in southern Germany. His idea was that community members pooled resources so individuals in need of loans could easily access funds. This first credit union model was soon established, and drawing inspiration from other cooperatives like the Rochdale Pioneers, early credit unions were operating in much of Europe by the end of the 19th Century.
In 1909, the credit union movement reached American shores. The movement grew quickly throughout America and Canada and soon began to have an influence across the rest of the world, notably in Jamaica during the 1940’s, and in Ireland during the late 1950’s.
Now an international credit union movement, there are 86,451 credit unions from 118 countries on 6 continents servicing more than 375 million members worldwide.
In the USA, 55% of adults are credit union members, 42% in Canada, 26% in Australia and an impressive 75% in Ireland, whilst in the UK its 3-4%.
Credit unions took longer to take off in England, Scotland and Wales, and there was no legal structure for credit unions in the UK until 1979. People who had seen the idea work in Ireland, the Caribbean, and North America were amongst the first British credit union pioneers.
At the end of September 2020, the British credit union sector had over 1.36 million members with total assets of £1.95 billion and total loans of £1 billion. The sector is growing. In the decade from 2011 to 2020, membership increased by 41%, loans by 71% and assets by 127%.
As a member of the Penny Post Group, you are part of a growing worldwide movement with ‘people helping people’ at the heart of everything we do.
