Credit Union Movement
Cooperative principles: the core of credit unions

The cooperative principles at the core of credit unions can be traced to the 1800s, to the early stages of Europe's Industrial revolution. For many people of this era, cooperation represented an opportunity to escape exploitation and to regain dignity.

The Worldwide Credit Union Movement

The cooperative principles at the core of credit union operation can be traced to the 1800s, to the early stages of Europe’s Industrial revolution. For many people of this era, cooperation represented an opportunity to escape exploitation and to regain dignity and self-respect through collective action and mutual self-help.

At first, the philosophy of equality, equity and self-help was confined mainly to the area of retail trade. In the late 1840s it broke new ground in Germany, where Frederick Whilhelm Raiffeisen, the mayor of a small village, embraced the democratic principles of cooperation to form a mutual cooperative through which local farmers could pool their savings and lend to one another at reasonable rates of interest. Under the guidance of mayor Raiffeissen and judge Schulze-Delitzsch, "credit unions" gained popularity and by the turn of the century had been adopted by urban and rural communities across Europe.

In the early 1900s, the credit union concept crossed the Atlantic to North America where Alphonse Desjardins and Edward Filene sponsored the first credit unions in Canada and USA. It was this development that ultimately was to have the greatest impact on the development of credit unions throughout the world.

By 1934, representatives from 22 American States had joined together to form the Credit Union National Association (CUNA). The various Canadian Leagues affiliated with CUNA in 1940, and 14 years later, this enlarged body established a World Extension Department to foster the growth of credit unions in other countries, including Australia.

The success of its activities led to the formation of the World Council of Credit Unions (WOCCU) in 1969, bringing to fruition the establishment of a truly worldwide credit union movement. There are credit union movements in more than 90 countries around the world with over 40,000 credit unions serving more than 118 million members (WOCCU Statistics 2002).

There are now countless financial institutions around the world that base their operations on the fundamental principles of co-operation, such as the Caisse Populaire (Canada), the Raiffeisen Banks (Germany), the Rabobanks (Holland), the Credit Agricole (France), and Cooperativas de Ahorro y Credito (South America), and Savings Clubs (South Pacific).