Celebrating 70 years of people helping people
International Credit Union (ICU) Day, celebrated on the third Thursday of October since 1948, celebrates the spirit of the global Credit Union movement. This year marks ICU Day’s 70th anniversary and well what a year it has been. Here at NZCU South, we have had massive organisation changes with the introduction of our new tier 1 banking system, Oracle Flexcube. This new system will help pave the way for our future direction of complete digitalisation of our financial services. Just like the World Council of Credit Unions belief, we too believe all people should have access to affordable, reliable and sustainable financial services. We hope with the continued cooperation of our members; we can reach out to all New Zealanders who are in need of financial services and seek to improve their lives, just like other financial cooperatives around the world have done for the last 70 years.
What is a Credit Union?
Just in case you are not familiar, a Credit Union is a not for profit organisation that offers financial services to its members. Locally owned, by members, for members, Credit Unions operate as a co-operative to its members as they work to the common goal of improving the lives and financial inclusion of their members. Although Credit Unions offer similar financial services to that of a bank, a Credit Union differentiates itself significantly by keeping itself local and owned by its members, not shareholders. Profits generated from Credit Union are returned back to its members in the form of affordable fees and competitive interest rates on loans and savings. A Credit Union is essentially people helping people. All investments and funds are raised by its members and for its members, meaning there is no need for mark-ups and profit margins. Credit Unions operates with the interest of their members at heart, and they plan on doing so for many years to come.
Credit Union Movement
The Credit Union movement first began in 19th Century Europe, by Franz Hermann Schulze-Delitzsh in the 1850’s in Germany. Franz developed the Credit Union concept in order to give those people who were lacking access to financial services, the chance to borrow from like-minded people who pooled their money together to support others. The Credit Union concept then expanded to North America, and in 1934, the turning point of America’s great depression, the national association for Credit Unions in the United States (CUNA) was founded. 20 years later, CUNA expanded overseas to operate globally and help tackle the problem of ‘usury,’ where financial organisations would charge unreasonably high-interest rates on borrowing. More and more individuals from underdeveloped countries were having their economic situations improved, due to the Credit Union movement. So on Nov 10, 1970, the World Council of Credit Unions was born. Today, The World Council operates around the globe assisting the Credit Union movement. More and more people are helping with people with there now being over 260 million Credit Union members globally.
The New Zealand Credit Union movement began 10 October 1962, by St Mary’s Catholic Parish in Nelson. The New Zealand Credit Union Movement swept the nation causing Credit Unions to pop up all around the country. In 1964, Colin Smith, a Hamilton chartered accountant, established the New Zealand Credit Union league. The league proliferated in size and by the early 1980’s New Zealand had several hundred operating credit unions. This lead to the need for government intervention in the forms regulations targeted at capital reserves and liquidity levels. Causing the smaller Credit Unions to merge with larger Credit Unions. Credit Union Otago (CU Otago) formed in 1987 and sustained continued growth over its 20 years, up till 2007 where it merged with five more Dunedin based Credit unions to become Credit Union Mainland. Then one year later in 2008, Credit Union Mainland merged with Credit Unions operating in Nelson, Westcoast, Canterbury and Southland to form one major Credit Union in the South island, Credit Union south, also known as NZCU South.
Credit Unions first were established to give individuals who were lacking financial services, a chance to fairly borrow money from like-minded individuals. The people helping people concept has now evolved into something greater, as Credit Unions operate with the belief that all people should have access to affordable, reliable and sustainable financial services. No longer are Credit Unions just an affordable financial institution for savings and borrowing purposes. Credit Unions also provide digital banking platforms, they educate members on financial literacy matters, and they operate on a local down to earth level where members receive personalised service. Credit Unions have evolved to offer similar services as that of a bank, without the need for overseas shareholders. Instead, they have their own members to thank, as it is their members’ contributions that make Credit Unions possible. With over 260 million Credit Union members now worldwide, it’s easy to see why we are so happy to celebrate 70 years of people helping people.