Close

Consumers disillusioned by big banks turning to credit unions

Credit unions are enjoying an upswing in popularity around the world as growing numbers of people turn away from big banks.

Credit unions are enjoying an upswing in popularity around the world as growing numbers of people turn away from big banks.

The World Council of Credit Unions, which represents 53,000 credit unions with nearly 200 million members in 100 countries, has seen a 4 million increase on the previous year.

“Given what has happened around the world after the global financial crisis, it’s understandable that more and more people are being attracted to trustworthy financial service providers like credit unions,” said Henry Lynch, chief executive of the New Zealand Association of Credit Unions (NZACU), which represents 21 member credit unions throughout the country.

Customers were looking to make socially responsible choices and gravitating toward member-owned financial cooperatives like credit unions, he said.

“Credit unions are 100 percent democratically owned by their members, with every member having one vote in terms of how the credit union is run, regardless of their level of investment."

According to Lynch, credit unions are "New Zealand’s best-kept secret". All ‘profits’ are returned to members through lower fees, interest rates and local community sponsorships.

Collectively, they rank among New Zealand's largest financial service providers (by financial transactions).

The United Nations has designated 2012 as the International Year of Cooperatives and October 20 is International Credit Union Day.

”Many people still fall victim to ruthless loan sharks because they believe their credit history and lack of financial understanding makes them ineligible for loans,” said Lynch.

“We’re keen to use International Credit Union Day to highlight the fact that there are other options. With our ‘people helping people’ philosophy, credit unions are a genuine, viable alternative for communities.”