News

BUSINESS & FINANCIAL TIMES, August 2012

"Co-operatives are a reminder to the international community that is possible to persue both economic viability and social responsibility." United Nations Secretary-General Ban Ki-moon

A credit union is a financial co-operative that helps in the mobilization of funds for use in future. Credit unions are owned and controlled by its members and thus have a hand in the fixing of rates and fees deemed right for the entire membership. This therefore means that the members own the credit union and implies that decisions or policies will be formulated and operationalized base on their approval.
Unlike the traditional banks, credit unions encourage its members to save the little despised amount of money they have for the future. Like the saying goes, "little drops of water make a mighty ocean."

The underlying goal of the Credit Union is the eradication of  poverty from among its members and their dependents through the provision of total relevant financial services. Importantly, the main theme of the World Bank Group is also for the eradication of poverty from all member states (Working for a World Free of Poverty). Credit Unions have shown to be the easiest and effective way to free the world from poverty.

In order for the Credit Unions to function efficiently and effectively the Apex body (Ghana Co-operative Credit Unions Association (CUA)) provides a wide range of support services which include but not limited to Risk Management, Central Finance Facility, Auditing, Field, Marketing and Public Relations services among others. The Risk Management programme for instance is designed to protect the members and their families as well as the Credit Union, the risk management (Loan Protection Plan) is an insurance policy that insures the borrower against the event where the borrower becomes permanently incapacitated or dies, The plan therefore protects the actors involved against financial loses and difficulties. The Life Savings Plan (LSP) insures the savings made by Credit Union members against death and disability. Auditors of CUA with support from the Department of Co-operative carry out audits of credit unions perodically to ensure that the generally accepted accounting records and the policies governing the Credit Union are being adhered to.

With these measures in place and supported by a vibrant IT department, credit unions are in a firm position to contribute immensely towards the eradication of poverty from the Ghanaian community and the achievement of the millennium development goal on poverty and hunger (MDG1). It is interesting to note, that five of the measures outlined by the World Bank in the attainment of MDG 1 are the pre-occupation of the Credit Union movement. No wonder the United Nations has declared the year 2012 as the International Year of Co-operatives with the following as its main objectives:
- To increase public awareness about co-operatives and their contribution to socio-economic development and the achievement of internationally agreed development goals, including the MDGs;
- To promote the formation and growth of cooperatives for socioeconomic empowernment; and
- To provide an enabling environment with policies, laws and regulation conducive to the formation, growth and stability of independent  co-operatives.

According to the UN chief, Mr Ban Ki-moon, Cooperatives are better tuned to local needs and better positioned to serve as engines of local growth. By pooling resources, they improve access to information, finance and technology. Their underlying values of self-help, equality and solidarity offer a compass in challenging economic times.

In view of these testimonies, it is important that goverments especially those in less developed and the developing ones like Ghana support the cooperative with the needed legislation and technical support to help alleviate extreme poverty and improve on the living standards of her countrymen. The cooperative model by far has proven to be a working one and in this age it key to the attainment of MDG 1, hence the need for all to join a credit union today and be part of the happy family.