MADISON, Wis. — Credit union membership on planet Earth has reached an all-time high of 177 million, according to World Council of Credit Union's 2007 statistical report.
"This marks not only the most members, but also the highest amount of assets, savings, loans and reserves that we've ever measured," said Dave Grace, WOCCU's vice president of strategic services.
The report charts the number of credit unions, members served, market penetration, savings, loans, assets and reserves. The most robust growth of 2007 was on the African continent, boosted by active WOCCU programs in Kenya, Malawi, Rwanda and Cameroon. Rwanda, which has a 60-year history of intermittent war, is experiencing a period of rebuilding and economic growth and produced 41% asset growth last year.
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"Credit unions in all of those places are providing financial services to more people, and they're helping people save, converting assets from nonfinancial savings," like chickens, tires, or jewelry and choosing financial assets instead, Grace said.
The central Asian countries of Afghanistan and Uzbekistan also gained big. Uzbekistan has a strong credit union system, with nearly $39 million in assets and 37% market penetration. WOCCU recently assisted with the opening of Afghanistan's 13th financial cooperative July 15 despite continued war between U.S., Afghani and NATO forces and Taliban opposition.
Worldwide growth is generally steady, Grace said, though macroeconomic crisis tends to spur credit union growth.
"Do people really understand the value of the cooperative? Well, when there's a crisis, that membership generally reacts differently. A gain's a positive benefit, which is the opposite of what occurs in banks," he said.
For example, in the late 1990s in Ecuador, the country's currency suffered a 1,000% devaluation in one year; no credit unions failed. They suffered, Grace said, but did not fail. A similar macroeconomic crisis occurred in Jamaica in 2000, when five large banks were taken over by the government and merged; however, the country's well-established credit union system did not require any support.
"Credit unions can take a long-term view of things because they don't have Wall Street analysts asking, 'What's your financial position going to look like in next 90 days?' The credit union ownership structure allows for the longer view, and that's really important during tough times," Grace said, adding, "that doesn't mean that credit unions are impervious to market conditions, but they can react differently to short-term shocks."
Grace said quite a few of the 48 countries represented at WOCCU's recent World Credit Union Conference in Hong Kong said they are seeing a spillover effect in their own banking systems due to problems in the U.S. In particular, banks in Australia and the United Kingdom made bad U.S. investments.
Just as recent U.S. bank losses have resulted in a renewed interest in the safety and soundness of deposits, credit unions worldwide also tend to prosper when bankers' chips are down.
Grace continued, saying that when times are tough, consumers always pick safety over rates. WOCCU released its 2007 statistical report earlier this month, and reported an all-time high of 177 million credit union members.
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