Credit union loyalists know we’re changing lives every day, but it’s very abstract. The Underground wanted to bring it home. We asked credit union veterans worldwide – including Dixie Abramian, CEO, Firefighters First Credit Union; Brad Houle, CEO, CAHP Credit Union; Ingrid Muller Costa and Gisele Gomes, Sicredi (Brazil); Eleonora Zgonjanin, CEO, FULM in Macedonia; and Elenita Sanroque, CEO, Asian Confederation of Credit Unions – how their credit unions and the credit unions around them are changing lives. These are their stories.

UNDERGROUND: Different nations and regions have different problems to which they’re seeking solutions. What are some of the critical issues where you work that credit unions can solve?

Dixie: At Firefighters First, we take a holistic approach to serving our members. People look to live long, happy, healthy lives, which includes the financial aspects of life. Firefighters are frequently focused on the welfare and well-being of the communities they serve. We believe supporting our firefighters and their families’ financial components through the various stages of life frees them to serve their communities. Our Net Promoter Scores show the importance of relationships in the credit union model, and our dedicated focus on our members has delivered a first-place rating among our peers for three quarters in a row.

Brad: Wildfires have devastated the state of California with more than 1.4 million acres burnt in 2018. I read that the Carr Fire suppression costs are more than $25 million, and the homes lost could be as high as $253 million. That’s a lot of people displaced with lives they need to piece back together, and we can help.

Ingrid and Gisele: Brazil is a developing country and faces very particular problems regarding peoples’ basic needs. I believe that credit unions are truly connected to the human beings needs and can offer financial solutions with a fair perspective, engaging the economic and social bias.

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Eleonora: Introduction of payment services, especially with the use of ICT innovation is a critical issue that FULM is working over the last few years, as well as the attraction of youth that FULM is focusing over the past years. Lots has been done, starting with cooperation with Universities for FULM to teach (students and professors) about the difference of credit union model, finishing with offering a student scholarship program. The scholarship program is connected with International Credit Union Day, which FULM works with MCUL, for more than four years.

Elenita: Except Korea, credit unions in Asia are unsupervised, posing risks to their safety and soundness. Credit unions face problems with delinquency, capitalization and governance. As a regional organization for credit unions, ACCU works with the national associations of credit unions to address issues. Our response is to allow national associations of credit unions to self-regulate the network, including rules on prudential standards, strategies for governance, sharing and pooling of resources, national marketing programs and human resource management and development, and mechanisms to protect the credit unions like lending supervision, Stabilization Fund. Since 2014, we have seen very encouraging progress, because the national associations are slowly building the foundations for credit union growth and sustainability. 

UNDERGROUND: How have credit unions’ efforts raised up entire communities?

Dixie: At Firefighters First, we are focused on the unique aspects of the membership we serve. Firefighters generally live in rural areas, and they frequently build homes, purchase boats,
ATVs, and other recreational vehicles locally. Our products and services directly address our community of firefighters through construction loans without the hassle frequently found at other institutions. We offer loans to purchase a wide variety of the items firefighters want, and we make it easy. Firefighters work hard, and they play hard. We are focused on improving their lives and supporting them in any way we can financially, so they are recharged to provide the necessary community support. It is truly an interconnected model.

Brad: California credit unions, along with the support of the California & Nevada Credit Union Leagues, have come together to support millions of California residents during this difficult time. It’s a great thing to see our cooperatives coming together.

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Ingrid and Gisele: The significant differential of the credit unions is to care about people. I believe the Worldwide Foundation can give us a great example. WOCCU, through its Foundation, is always present in countries and communities that need resources. The efforts in Puerto Rico, Haiti and Busia show us clearly how the CU movement can raise communities and nations worldwide.

Eleonora: FULM over the years, has introduced lot of efforts to help people from different communities in Macedonia. Promoting and supporting education via scholarship for students is our most important activity. Training for women and youths is ongoing for about 20 years. We’ve held a lot of sessions on nearly all university campuses in Macedonia to promote better access to finance and financial education. Teaching farmers how to understand the numbers that come with borrowing is a daily activity for FULM employees.

Elenita: Credit unions in Asia are mostly operating in the rural areas and in poor communities. One example is the Cooperative I worked with in the Philippines - Paglaum Multi-purpose Cooperative. The grant given by the Global Women Leadership Network was used to support the establishment of a business development center in the coop. PMPC operates in 53 municipalities and nine cities in the Southern part of the Philippines where poverty is high. The innovations have improved the quality of service to those who have less by incorporating wealth building strategy (savings) rather than creating dependency on loans, continuous education, doorstep service, self-help group pressure and graduation to regular membership in the credit union. We recognize that access to affordable financial services, savings and credit, and education would not ensure the sustainability of the entrepreneurial poor. ACCU equally recognizes the importance of Access to Markets as an important component.

The establishment of BDC helps create demand for loans. PMPC grants loans for productive purposes, but in the absence of proper investment analysis, the loan recovery is at risk. BDC is a tool to support the lending activities of PMPC. The BDC provides an integrated set of choices on business development services leading to members’ successful enterprise. The cooperative has reached 35,000 poor women, who now have the opportunity to improve lives.

UNDERGROUND: Please provide at least one example of how credit unions have changed an individual or a family’s life for the better.

Dixie: We have provided 90-day loan extensions and supported numerous families in financial need due to medical expenses or unforeseen circumstances. Firefighters First also provides support to firefighter communities and the local communities in which they reside through event sponsorships and contributions. The credit union recently donated backpacks to children in foster services, directly affecting the community in which we are located. Our efforts directly impact communities and further the mission of people-helping-people, which is so central to the work of our first responder membership.

Fire Family Foundation, the charitable arm of Firefighters First Credit Union, is focused on supporting firefighters nationwide. Through the Foundation, we’ve supported firefighters who have lost their homes while off fighting other fires. We’ve supported the families of fallen firefighters with monetary contributions to assist with key needs. The Foundation has also assisted a firefighter with the purchase of a trained Federal Emergency Management Agency dog to assist in search and rescue.

Brad: CAHP Credit Union recently provided a low-rate Fire Relief Loan to a California Highway Patrol officer and his family who lost their home in Northern California. The family lost all of their possessions during the recent wildfire near Redding, California. We also established a wildfire relief fund to help this and other families.

“The success of credit unions is measured on the number of lives they change instead of the amount of assets or profit it accumulate.”—Elenita Sanroque, CEO, Asian Confederation of Credit Unions

Ingrid and Gisele (pictured): Working directly with programs, such as the GWLN, enables us to see how credit unions change lives. We see how it is providing measurable advances in Brazil, by impacting and involving women who are engaged with the Women’s Committees and the Sister Society Brazil throughout Sicredi credit union system. It gives them empowerment, and empowerment provides choice and voice. Thousands of female members are participating in more of Annual Meetings, having access and being motivated to attend to events and training programs for women and also initiatives linked to attract women, making the difference in the lives of our communities. That’s amazing and inspiring. Motivating women and men, side-by-side, when planning and making decisions is key to creating better and more sustainable communities.

Eleonora: Here are a couple of the many microbusiness success stories from our members:

“I was unemployed and wondered how to think of life. I tried to work in a few places, for a little money and without hope and perspective ... The moment when it occurred to me that I could make the famous Macedonian pastry (Gevrek) and sell them, was my lucky moment – a milestone, although at that time I did not think so ... One after one gevrek, I constantly increased the production, kneading myself, manually. But people liked my views, and they searched more and more each day. My hands were sick, I did not get it. Now, I have to buy a dough-washing machine. But, it's expensive, where can I find money? And, so my success story began, after the first machine, the second, and the furnace. I opened a company on my behalf, and then the employees.”

Another story comes from female entrepreneur, Violeta:

“My story began long ago, helping my father who had a farm for agricultural products at the Green Market in Skopje. For years he has been sustaining us, and I was constantly beside him, learning from him. It left me more and more to sell myself. I took care of production and sales. It was not easy, so my children came in and helped how they could. After a certain period of time, I became independent, and I better organized my work.
“The time came to expand the business. As officially unemployed, the biggest question was where to find investment funds. According to the folk saying: Who seeks - I will find, I found FULM Savings House and their loans for unemployed persons, the goal of which is to encourage self-employment and small businesses. This loan was the perfect answer to my needs. I took a loan, and I set the money for renting more stalls for selling on green markets. I can say that I am very pleased with what I have achieved – I continued and expanded my father's family business and provided a stable income for my family.” (Find more stories from FULM, and GWLN project here.)

Elenita: Irene Tagaan is an entrepreneur and a member of Paglaum MPC. She makes donuts that she sells in a local market while her husband used to work in a bakery in the town. They could hardly meet their daily needs, such as house rent and kids’ education. Her husband is earning USD 10/day and Irene earns USD 5 a day. PMPC provided her training to improve her product packaging and marketing. The coop granted her a loan that enabled her to purchase new equipment. Finally, her husband resigned from his job and both Irene and her husband are now operating their own bakery shop. They were able to buy a piece of land where they build a simple house. Irene’s income has tremendously improved. She said she is fulfilling her dreams and very happy with the help of the cooperative. 

UNDERGROUND: What is the biggest challenge credit unions in your area are currently working on?

Dixie: All credit unions are facing competition from fintechs, online financial institutions, big banks, and things that have yet to be identified. As processes are automated and competition grows, we strive to identify the necessary resources to continue our good work. We are focused on everything that competes with the human element, which we believe cannot be replaced. Our dedication to legendary service relies on ease of use with relationship. Automation is the key to many things, but it does not replace knowing your member and sharing in the journey from start to finish.

Brad: The California wildfires were labelled a national disaster on August 4, 2018, with more than $1.06 Billion in damage. The fires continue to affect credit union members throughout the state as they struggle to rebuild their lives.

Ingrid and Gisele: Financial inclusion and education are the biggest challenges for credit unions in Brazil. Sicredi CU System counts on its strategic plan and has been experiencing enormous, organic growth. We are in areas where banks are not to overcome lack of access. Besides that, considering another important aspect of financial inclusion, usage, the Central Bank of Brazil and Sicredi are working hard on financial education. Brazilian people present serious lack of savings habit. In 2012, for example, only 20% of Brazilians reported saving, and half of them did it in the informal sector, according to data from BCB.

Eleonora: Thanks to the GWLN Project three years ago, FULM crafted a completely new communication strategy. The key challenge was to better communicate with women, especially youths. As a result of implementing this new communication strategy, FULM has experienced successful growth and outreach to woman and youths. FULM was awarded the 2018 World Council Growth award.

Regulatory burden has been pretty challenging over the years, especially when introducing new services. Differentiation of new fintech companies is the challenge that we accepted, so a few years ago we began working every day to promote and teach our members about the existence and the need for digital delivery channels.

Elenita: Governance is a big challenge. Many leaders are now forgetting the meaning of their involvement in the cooperative – helping people help themselves. There should be a constant reminder that cooperatives are helping people fulfill their life goals and aspirations. The success of credit unions is measured on the number of lives they change instead of the amount of assets or profit it accumulate.