Happy New Year from CFCFE to all its credit union members, corporate members and to all stakeholders in community finance. 2020 was a dreadful year in many ways for many people, but it also showed the strengths of the co-operative finance sector in focusing on the needs of members, communities and co-operative cousins when they really needed it. Inspiring examples from across the globe include keeping branches open for the community in Ireland when banks closed them in the face of the pandemic (see our report here), providing a listening ear to isolated and lonely members in Britain and offering them information and advice (report here), and further afield the donation of 40,000 face-masks by the National Credit Union Federation of Korea to fellow credit unions internationally.
It is hard to look positively at 2021 while we count the days to pervasive vaccination of our fellow citizens, but plan ahead we must, and here are some predictions of what the credit union sector will need to address in the coming months:
- Lending to members in a fragile economic environment – with some members’ jobs at risk and indebtedness increasing, working out the balance between need and risk will be a critical test
- Managing excess liquidity – many members have been able to increase savings and / or reduce borrowings during the restrictions of 2020, leaving some credit unions with worrying trends in savings-to-asset rations. We’ll be researching this topic urgently to consider how credit unions can respond beyond doubling down on lending
- Keeping pace on digitalisation – there will be no turning back the clock on 2020’s behavioural shift towards digital channels. Keeping pace with this change, while supporting members who are or who feel excluded from this new way of interacting with money and the world will be a necessity for credit unions
- Developing the business model – across the credit unions movements in both Ireland and the UK there is considerable unevenness in commercial performance and resilience. Will sustained surplus come from increasing awareness of the credit union offer, improving execution of existing services or developing new ones – or all of these?
Nick, Paul and Ralph at CFCFE look forward to working with credit unions and partners over the coming year to make the lives of members better by addressing these and other known and as yet unknown challenges.