Irish Credit Unions The Poor Man's Bank

A self-fulfilling metaphor ?

The metaphor of the "poor man's bank" is one that is sticking it seems to Irish credit unions. But this is not what credit unions are and is not where they come from. They were never poor man's banks unless working class are considered poor. It seems that poor man's bank is a metaphor resulting from an anti-poverty ideology espoused by some credit union leaders. Providing affordable credit to those less fortunate and on the margins is an eminently worthy purpose but it is not the overriding purpose of credit unions.

Initially credit unions were established by ordinary working class people who had a real social need and that was access to affordable credit. The banks at the time weren't interested and "buying on the tick" was the only access to credit most people had. The working class could also afford to save a little. By pooling small amounts of savings it was possible to borrow larger amounts from another. Thus the co-operative peoples owned banking model took root.

It was a revolutionary idea that across the world has had many manifestations. Each one of its time uniquely delivering affordable credit within a certain stage of the socio-economic development of a nation.

This was so for the Irish credit union movement which grew to be one of the greatest social movements in Irish modern history. That is until the late 90's when the pace of change of Irish society took off and left credit unions behind.

Now the generation of working class who started with credit unions are solidly middle class and no longer borrowing from their credit unions. A new generation of Irish save and borrow from those who offer the best rates and most convenience. Credit unions are having to compete in an open market and no longer are the only providers of affordable credit. Stress lines are appearing in the fabric of the movement as volunteering and community participation depletes in the face of individualism. Greater complexity, regulation and supervision, increased public and media scrutiny demands higher levels of governance,management, compliance and professionalism of financial institutions. The public expect the best standards of health care of voluntary hospitals and likewise expect the best standards of governance and management of credit unions.

The future is full of challenge. What is required is leadership that understands that a "Peoples Bank" is a far more powerful metaphor than a "Poor Mans Bank" and re-invigorates credit unions for a modern Irish society.