Credit unions were hit less hard than big banks. Their loan portfolios are made under rigorous guidelines, but the repercussions of the financial crisis has rippled through the economies of most countries.
Patrick Fay of the Irish Credit Union League said many Irish credit unions had invested in toxic products, causing them to lose money. Credit unions faced a lending challenge. Flush with deposits, they turned to these investments. Despite the problems, he said that credit unions are still properly capitalized. The government is insuring credit union funds for the first time.
Flowers may not seem like a credit union problem, but in Kenya, where they are a major export, and flower workers are credit union members. Reduced exports to Europe are affecting local credit unions, according to Carilus Ademba, managing director of the Kenya Union of Savings and Credit Co-operatives. Besides flowers and other export worker layoffs, tourism is down and that affects members in that industry as well. Donor funds to the Kenyan government are down. Sources of money for credit unions are becoming more expensive.
In Zimbabwe, where inflation has left the country devastated, Spiwe Gudza said many SACCOs have closed their doors. Hers stayed open only because it owned the building and rents were paid in dollars and rands.
Singapore has insured unlimited credit union deposits for the first time, according to Chan Fong Leng, chairman of the Strait Times Co-op, but this will last only until October 2010. Prior to that, $20,000 was the limit for financial institutions, but credit union deposits were left uninsured.
Ross Lambrick, regional manager of Old Metro Credit Union in Australia, said that his country's tight banking regulations made the crisis far less severe, and credit unions were virtually unaffected.
Sonia Hamilton, president of the National Workers Co-operative Credit Union in the Bahamas, said the crisis has led to far less tourism, an industry where most of her members are employed. Many members have lost their jobs or have had their work hour cut. However, she sees a change in behaviour that bodes well both for credit unions and their members. Those still working are increasing their savings and becoming more financially savvy.