1. Know THE CREDIT UNION Difference

2. Despite the competitive nature of today’s financial market place credit unions worldwide continue to thrive because they differentiate themselves through: - The quality of service they provide - The quality of service they provide - Community focus

3. What’s the Difference? Each credit union must make that distinction of what makes it different through assessing its own market space and the community in which it operates in order to determine how to differentiate itself from other local financial institutions and how to create its own unique niche.

4. Credit Unions? Financial co-operatives Financial co-operatives Provide saving and lending products to members Provide saving and lending products to members Each member must be a shareholder Each member must be a shareholder Member owned, member operated Member owned, member operated Unpaid volunteers from the membership Unpaid volunteers from the membership Democratic – one member, one vote Democratic – one member, one vote Exists for the benefit of the members Exists for the benefit of the members Members direct credit union policies Members direct credit union policies

5. Credit Union Myths Credit unions are small banks Credit unions are small banks Credit unions are charities Credit unions are charities Membership means guaranteed loans Membership means guaranteed loans Larger credit unions should be taxed Larger credit unions should be taxed Credit unions are for poor people Credit unions are for poor people Credit union should always remain small Credit union should always remain small

6. The Global CU Difference Democratization of societies providing people with: A means for democratic participation and self-help community organization A means for democratic participation and self-help community organization An alternative source for financing income generation, while large enterprises down size and close out. A source for financing entrepreneurship and promoting self employment

7. Difference #1 - Membership The most distinctive features of a credit union include: Open Open Voluntary Voluntary Nondiscriminatory Nondiscriminatory Benefits include: Benefits include: Lower rates, Higher interests, Lower fees, Improved services

8. Difference #2 – Service to Members A range of services including: A range of services including:SavingsChequing Youth a/c Seniors a/c LoansInsurance Money transfers Investments Other financial services Other financial services

9. The Hallmark of Credit Unions The strong commitment to member service because of the member focused structure of credit unions The strong commitment to member service because of the member focused structure of credit unions Unlike banks and other financial institutions credit union members are also its owners Unlike banks and other financial institutions credit union members are also its owners Superior Member service Member Satisfaction + Higher retention Members = owners + Governance structure

10. Providing Affordable Access to Financial Services CUs are very receptive to members needs. CUs are very receptive to members needs. Special consideration for rural communities, the poor and ethnic minorities The co-operative nature of CUs provides a self- help structure to the marginalized, who, had there been no CUs would be at the mercies of Government and ‘for profit companies’ The co-operative nature of CUs provides a self- help structure to the marginalized, who, had there been no CUs would be at the mercies of Government and ‘for profit companies’ In times of hardship CUs are often able to adopt more sensitive approaches to accommodate individual member needs In times of hardship CUs are often able to adopt more sensitive approaches to accommodate individual member needs

11. Globally – Credit Unions provide Financial services to the excluded: U.S. – CUs serve low income, immigrant markets with remittance services and start savings for thousands of “unbanked individuals” U.S. – CUs serve low income, immigrant markets with remittance services and start savings for thousands of “unbanked individuals” Guatemala, Jamaica, Ecuador, Kenya and Sri Lanka – CUs are largest source of micro-finance Guatemala, Jamaica, Ecuador, Kenya and Sri Lanka – CUs are largest source of micro-finance Canada and Australia - CUs are taking over rural branch network abandoned by banks and are in some communities the sole providers of financial services. Canada and Australia - CUs are taking over rural branch network abandoned by banks and are in some communities the sole providers of financial services. Honduras, Sri Lanka, Brazil and Mexico - CUs provide over 50% of rural financial services. Honduras, Sri Lanka, Brazil and Mexico - CUs provide over 50% of rural financial services. Philippines and Ecuador - CUs are an important source of financial, health and general education to many poor rural women Philippines and Ecuador - CUs are an important source of financial, health and general education to many poor rural women

12. Appropriate Legislation and Regulation A sound credit union sector must have enabling Legislation and Regulation A sound credit union sector must have enabling Legislation and Regulation Credit unions are not banks and are not non governmental micro-credit institutions, hence CUs must be regulated and supervised differently. Credit unions are not banks and are not non governmental micro-credit institutions, hence CUs must be regulated and supervised differently. CUs should be prudently regulated by competent regulators who understand the structure and social difference of CUs from other financial institutions. CUs should be prudently regulated by competent regulators who understand the structure and social difference of CUs from other financial institutions. CU supervision must reflect the risk that the cu carries CU supervision must reflect the risk that the cu carries

13. More of the Credit Union Difference CUs often lack access to conventional capital markets CUs often lack access to conventional capital markets Grow capital over a long period of time, internally mainly through retained earnings and share capital Grow capital over a long period of time, internally mainly through retained earnings and share capital Being retail oriented risk is more spread over a large number of savers and borrowers Being retail oriented risk is more spread over a large number of savers and borrowers

14. Remember credit unions are not banks! To efficiently service the financial needs of members, CUs NEED to have: To efficiently service the financial needs of members, CUs NEED to have: Access to interbank clearing Access to interbank clearing Settlements system Settlements system Central bank services Central bank services Deposit insurance privilege Deposit insurance privilege Other wholesale services offered to other financial service institutions Other wholesale services offered to other financial service institutions

15. Appropriate Legislation and Regulaton Appropriate Legislation and Regulation Is vital to build and maintain members’ confidence in the financial viability of CUs and to ensure continued growth and improved services to members

16. Social Goals of Credit Unions Credit Unions are: social movements social movements Civil movements Civil movements Self help movements Self help movements Credit Unions exist to help people not to make a profit

17. Social Goals of Credit Unions Customer satisfaction - the ultimate measure of success for CUs is increased when members see their CUs taking actions that benefits the greater community Customer satisfaction - the ultimate measure of success for CUs is increased when members see their CUs taking actions that benefits the greater community CUs promote financial education – providing members with the tools and information to improve their decisions regarding financial issues CUs promote financial education – providing members with the tools and information to improve their decisions regarding financial issues

18. Social Goals of Credit Unions cont’d To achieve these goals efficiently, CUs: Pool marketing resources etc. Pool marketing resources etc. Pool financial resources – intra-system lending & investing Pool financial resources – intra-system lending & investing Share human resources Share human resources Use common branding Use common branding

19. Summary Democratic structure Democratic structure Service to members Service to members Social goals Social goals Over 150 years Serving over 136 million In over 90 nations worldwide

20. Thank you