The Development of British Credit Unions: 'From the Margins to the Mainstream'.

The study investigates the reasons why British credit unions failed to achieve the levels of success enjoyed by similar organisations in other countries. Despite recent growth in membership to approximately 300,000 in 2001, a growth of 17% during the year 1999/01, credit union membership as a percentage of the total population is disappointingly low at 0.4%. Internationally credit unions have a much larger share of the financial services market. Jones (1999) argues that British credit unions' lack of impact can be attributed directly to the approach taken to their development - particularly the development of community-based credit unions. Internationally credit unions are considered to be cooperative financial institutions operating as profitable businesses; where as in Britain, credit unions are assumed to be small, community projects focusing on social rather than economic goals. Jones argues that this assumption has seriously hampered their development. Jones suggests that if credit unions in Britain are to achieve the success enjoyed by credit unions internationally then it is necessary to have a new approach to development, called the 'new model', which focuses on economic rather than social goals, professional management rather than volunteerism, and economic sustainability as opposed to grant-dependency. This study took place between 1998 and 2001 during the writer's employment by the Association of British Credit Unions Ltd., and was largely based on the writer's Implementation of the recommendations made by Jones for 'new model' credit unions, using a combination of qualitative methodologies: historical research, participant observation, and action research, based on 29 case studies. The qualitative data was triangulated using quantitative data drawn from central government and local authority statistics. The research confirms Jones' findings but proposes that there is scope for British credit unions to move from the margins to the mainstream of financial services provision subject to: the implementation of more innovative organisational structures, development funding being provided directly to the credit unions, rather than through development agencies, and credit unions being managed as sustainable and economically viable businesses, by professional trained staff directed by committed elected officers, in accordance with internationally accepted co-operative principles within the wider cooperative movement.