<p>MADISON, Wis. – "The world." With these words Arthur Arnold, CEO of the World Council of Credit Unions (WOCCU), described what credit unions are doing worldwide in the broadest terms. Credit unions in undeveloped countries are still fighting battles that credit unions in other countries have already won. CUs in the more developed countries such as New Zealand, Ireland, Australia and the United Kingdom, are facing their own set of challenges. Still, credit unions worldwide are making a difference in the lives of their members. Credit Union Times talked to credit union leaders in nine countries, as well as to Arnold and Kecia Doyle, marketing communications manager of WOCCU to see what issues credit unions worldwide are facing and what they're doing to deal with them effectively. South Africa's credit union movement is small with only 28 credit unions. They have spent the last five years trying to change from a "welfare orientation towards a business orientation," according to David DeJong who heads the five-person Savings and Credit Co-operative League of South Africa (SACCOL). SACCO (Savings and Credit Co-operative Organizations) has replaced the word credit union, because he said anything with the word "union" in it had negative connotations for South Africans. SACCOL credits the worldwide credit union movement and the international community as being their strongest supporters to help combat the predatory lending practices on a micro level that are epidemic in South Africa. DeJong especially cited the Irish League of Credit Union Foundation's efforts. He said because of their help they are "now able to continue working in some of the poorest areas which we were previously unable to afford." SACCOL's staff will be kept busy over the next few years, DeJong said, pushing for a legislative framework to support credit unions, educating the public to what a SACCO is, and setting up employee credit unions. Malawi, a struggling movement, is having far greater problems with famine, an ever-present danger that goes beyond what poorer countries in other parts of the world are experiencing. Famine is not limited to Malawi. Aid agencies are predicting that between now and the end of 2002 more than one million African people could starve to death unless help is attained. Credit unions need a basic level of subsistence to function and there is grave danger that many places in Africa will fall below this level. Latin America, which still has a large number of poor also has a growing credit union movement. The Caribbean Conference of Credit Unions is celebrating their 30th anniversary and is often used as a training ground by WOCCU for former Communist Block countries interested in developing credit unions there. Other steps being taken in Latin America include Nicaragua, which is in the process of computerizing their system. Mexico is poised for a major WOCCU strengthening project. There are growing credit union movements in a number of the former Soviet Block Countries. Poland, the host country to WOCCU's conference, has been a major success story. Other movements are advancing in Romania and Bulgaria with the help of WOCCU. Russia now has 410 credit unions. According to Svetelana Amosava of the Russian Credit Union League (RCUL), the biggest change over the past five years is that credit unions in Russia are uniting into regional leagues. WOCCU has always promoted strong credit union legislation, and Russia has adopted its first pro-credit-union law with a second under debate at the DUMA, the country's legislative body. It is a start. Without protective legislation, all co-operatives, not just the credit unions, run the risk of being seen as corrupt. Amosova said her biggest challenge is to convince people to save money. Her goals over the next five years is to see more legislation in place and greater use of technology. While credit unions in many countries are still in their infant stage, other countries have a mature credit union industry. They face a different set of challenges that have nothing to do with hunger, legislation, or the introduction of technology. These credit union leaders deal with maintaining market share, political in-fighting and guarding or expanding legislative gains of the past. Australia is a perfect example. With 200 credit unions over 3.5 million Australians, or around 20% of the population, are members of a credit union. According to Peter Hansen, spokesperson for the Credit Union Services Corporation Australia Unlimited (CUSCAL). "The most significant change encountered by credit unions over the past five years has been the entry of new participants in the retail banking marketplace. These entrants have come from the ranks of non-financial as well as financial firms, relying on well regarded brand names and pricing to capture business from traditional participants – banks, building societies and credit unions. In addition, the globalisation of the financial services market has brought many overseas competitors to our shores." Australian credit unions are playing on a level field, having to pay taxes, but they have no common bond limitations. Hansen pointed out that, "The trend of consolidation within the Movement is expected to continue to be the main confronting issue affecting the development of the Australian Credit Union Movement. While merger activity has slowed over recent years, it could well accelerate over the next couple of years. The increasing pace of financial service regulation and compliance – encompassing privacy, codes of conduct and new product disclosure regimes – coupled with competitive pressures could force more smaller credit unions to consider mergers. " CUSCAL itself has undergone some major changes in attempting to meet its members' needs. Areas of focus for the future are CRM, e-commerce initiatives, aggregation, outsourcing and governance." In New Zealand, Raymond Howard of the New Zealand Association of Credit Unions (NZACU) said New Zealand's 57 credit unions face a new competitor, the government-launched Kiwi Bank. Like their credit union cousins in other countries, New Zealanders face all the other competitive products offered by other financial services. Credit co-operatives are not a new concept in New Zealand having been around in one form or another since the 1840s. The strength of New Zealand co-operatives is their member-owned local structure in comparison to the major banks, which are mainly run from other countries. NZACU is still pushing for more favorable legislation, although they are pleased to still be tax-free. Far away from the continent of Australia is a much smaller island country where credit unions have been a major force in the financial lives of its citizens for more than four decades, with 535 credit unions fully functional today. Ireland is the success story of the European Union. According to Patrick Fay, general manager of the Irish League of Credit Unions, this has brought with it a " change in the financial services environment." It is more competitive and has a far wider range of products. Likewise, consumers, once who thought their only choice was a pawn shop, now are financially sophisticated. Credit unions must match their expectations. Likewise, with the European Union bringing down borders for financial products, the competition in the future can come not just from Irish financial service providers, but from those in other European countries such as France or Italy. Irish credit unions have a problem that some of the developing countries can only dream off. They are experiencing a 20-year high on savings. This is the result of a combination of low unemployment and state sponsored savings encouragement programs. One such special government saving incentive offered to match every four Euro saved with one Euro. Combined with high interest rates on top of the 25% gain offered by the government, it is little wonder that savings flowed into these special accounts. ILCU has recently faced some serious challenges. For example, an unsuccessful introduction of an industry-wide computer system caused some serious soul searching, and an independent council examined the structure of the league. The results of the decisions will be impact ILCU's activities over the next few years. The United Kingdom may be a country in the developed world, but ironically the credit union industry is still in a fledgling state, only slightly ahead of that in undeveloping countries. In the UK, credit unions will undergo a formal change of governing bodies to the Financial Services Authority in July 2002. They have been preparing for the switch for the past two years with a flurry of new regulations being written. The Association of British Credit Unions, Ltd.'s (ABCUL) 25-employees have been active in trying to help the 666 credit unions prepare for the change. Previous strict regulations meant many of the credit unions were small, volunteer run. Over 46% of the credit unions in the UK have less than 250 members. However, since growth restrictions have been modified, the credit unions are in position for a major growth spurt. ABCUL spokesperson Abbie Shelton told Credit Union Times, "For many credit unions, the realization is that in order to serve a significant section of their common bond, they need to be sustainable, have premises and staff, and market themselves professionally. " Shelton predicts that although the number of credit unions may shrink, the strength of credit unions through mergers will grow. ABCUL recently launched a pilot program for PEARLS (Protection, Effective Financial Structure, Asset Quality, Rates of Return & Costs, Liquidity, Signs of Growth) WOCCU's accounting system. ABCUL is also working with the government to allow credit union accounts to be covered by the Savings Gateway program, where the government matches savings. If each country has separate challenges, what is WOCCU's overview for the future? WOCCU's Arnold stated that they need, " To stay member driven, to maintain the co-operative principles, to employ the excess capital that we collectively have, and to stay young." Arnold is known for his almost fanatical dedication, "To provide access to affordable financial services to the Have Less, i.e. enabling millions of people to grow!" Meanwhile he encourages credit unions "to look over the border of our own community, territory, market place: we live in a World without Borders." In talking with representatives from credit unions around the world, Credit Union Times heard the same goals, the same problems, the same desires. [email protected]</p>