Credit unions may be cooperatives, but they don't always cooperate.
Three representatives of non-U.S. credit union communities, however, shared examples of where cooperation among credit unions in three respective countries has created a market advantage.
In Nicaragua, for instance, credit unions have made a huge leap forward competitively after agreeing to act much more as part of a network, rather than individual operations. Mark Cifuentes, senior manager with WOCCU and a project manager with Nicaragua's credit unions, said integration has driven growth, but the integration was not easy to bring about.
"The international movements have wanted to integrate their credit unions, but not many have had success," said Cifuentes. "Integration is very much like a marriage. In order for it to work its players must learn to give in, receive, and constantly search for ways to find equilibrium. For movements to integrate they must do they same. Even though we do call ourselves cooperatives, we do find ourselves clashing with one another. We have difficulty integrating because we have our own individuality."
Why are credit unions having a hard time competing and integrating with each other?
Cifuentes said one reason is the lack of transparency among some CUs, which leads to an absence of confidence in working with other CUs. Other problems:
* Confusing financial information, stemming from the lack of financial standards. "This is a key to stopping credit union integration," he said.
* Lack of competitive products and services, and fear of other CUs offering those same services to members.
* Poor public image. "In some cases we have a poor image," said Cifuentes, referring to either mega-management or boards that are too large or autocratic with which to work.
* Social vs. business philosophy. "Even though we say we are Polish or French or Ugandan or Kenyan, we only say that as somewhat of a romantic word. But when we look at credit unions in our own country, we try to compete with them. Even though the philosophy guides us, it's often more of a romantic notion."
What is integration? According to Cifuentes, it's the ability of members to have access to a network rather than just one credit union. Credit unions that have integrated, such as in El Salvador, have not just a network but the same visuals at each of their offices. "
In Nicuragua, Cifuentes noted that the credit unions share more than just signage. Many branches share a similar internal design and all use the same paperwork and procedures. There are now 24 branches in the network serving rural areas, which ties it with BancCentro as the largest provider. "When we see the same standards for all of us we are able to speak with the same voice," said Cifuentes. "When it happens the strength of one becomes the strength of many."
