One Credit Union's Experience in Working with the "Disadvantaged"

BRISBANE, Australia – The World Council of Credit Unions (WOCCU) has been behind many development projects in countries around the world, working with credit unions to serve the underserved and economically empowering people through micro-financing projects. So it was not surprising that one of the break-out sessions at WOCCU’s 2003 International Forum here dealt with serving the disadvantaged. Speaking in “Challenges and Opportunities for CUs Serving the Underserved,” Liz Laffan, CEO, First Nations Australian CU, told conferees about one such project sponsored by the CU. First Nations Australian CU was founded and continues to operate with the goal to make the Aboriginals more self-sustaining financially. In 1999, former WOCCU president Chris Baker, called the initiative “the most significant credit union project in the world today.” First Nations was founded, Laffan said, “to assist Aboriginal and Torres Strait Islander peoples take better control of their financial and economic futures. They established an independent Aboriginal Credit Union owned and operated by Aboriginals to provide quality services to members via the use of quality systems.” It was an ambitious goal that was made all the more difficult because to work First Nations needed to be available nationally. Aboriginals and Torres Strait Islander people were scattered throughout Australia. To accomplish their goal, First Nations worked through the Australian National Credit Union (ANCU), which has over 400 staff, 200,000 members, and Aus$1.8 (US$1.2) billion in assets. Although affiliated with ANCU, First Nations has maintained and will maintain its own corporate identity, goals and methods. The concept originated in the late 1980s. It took a decade for the credit union to meet its goal. The term disadvantaged is not always the best word to use, said Laffan. At one time, the Aboriginal people had an advanced and complex society that met their own needs. Their social structure involved 600 clans with a variety of dialects. But rapes, massacres, disease brought by Europeans reduced their population to 3% of what it had been by the turn of the 20th century. Their culture was considered primitive, and until the 1960s they were segregated from the main Australian population. There was a move “to breed out their color,” Laffan said. Major reforms were legislated in 1967 when the Aboriginals were given the right to vote. However years of deprivation had taken a toll, and the Aboriginals were ill-equipped to handle a modern financial society. Enter First Nations Australian Credit Union. The objective of ANCU in setting up First Nations was to provide systems, support and expertise so First Nations’ members could be independent. It needed to provide normal banking products such as savings and checking accounts, ATM cards and loans. But it also needed to teach goal setting, budgeting and other basic financial management skills. Product availability was an issue. By maintaining a National Call Center, an ATM network, and using Post Offices as branches along with the ANCU system, they were able to reach out to the Aboriginals no matter where in the country they lived. Affordability was another issue that had to be solved. Accounts in banks carry charges on most services. First Nations offered most services free. Traditional products were adapted to needs, especially loan products. Documents like “My Moola” were also developed. Although a comic book format was used, the information was serious. Financial education was presented in simple but practical terms. The people were encouraged to control their own destiny. In fact, according to Laffan, the overriding mission of the credit union is “to assist members to take better control of their financial and economic futures.” Credit unions grew out of the need to help the poor who didn’t have access to mainstream financial services. That effort continues worldwide. -