What One Credit Union CEO Has Learned In His Travels Around World
When Bob Lestina, CEO at Heritage Credit Union here, set off to to Thailand and Indonesia it was to examine the viability of sportswear manufacturer Adidas establishing credit unions or other cooperatives at their overseas factories,
But Lestina, a former executive with the World Council of Credit Unions, said that while he went on a mission to educate, he learned a few things himself.
"It's really a tremendous exercise in critical thinking when you travel to countries like this," Lestina said. "Here in the U.S., we have a very established credit union movement, and just about everything we do is pretty well defined. Over there, there are no rules, there are no precedents, so it takes a lot of creativity to get around the challenges. It really renews your critical thinking, and it rejuvenates a passion for helping the underserved."
Adidas is considering establishing credit union-like cooperatives for its factory workers in a number of its Asian operations following Lestina's evaluation and report. Adidas contracts with local factories to manufacture merchandise and currently operates in several Asian countries, including Vietnam, Cambodia, Thailand, and Indonesia.
Through Adidas' social and environmental affairs division, the company attempts to raise workers' living standards by convincing factory owners that helping their workers is not only good for business but it also meets Adidas' commitment to its partners.
Travel To Factories
Lestina was based in Bangkok and Jakarta and traveled to several factories, meeting with company owners, managers and workers. Working with local support organizations, he also met with regulatory authorities and studied the cooperative law in each country.
Credit unions weren't the only type of cooperative Adidas asked Lestina to evaluate. "We looked at cooperatively-run retail stores, health clinics, child care and savings and credit. The key is how sustainable are they, and savings and credit flies to the top when you look at sustainability," he explained. "The others are too expensive if the factory isn't willing to subsidize the endeavor. Plus, if you want to reach the greatest number of people, savings and credit makes the most sense. Only those people who have children are going to be interested in child care; even with health care, most of your interest is going to come from older people. And there's just too much competition in retail to make that a good option. But everyone needs financial services, and in these areas there is little or no access to financial services. It's mostly black market."
After evaluating the viability of establishing cooperatives at the factories, Lestina was charged with drafting a guidebook for factory owners who may be considering starting a cooperative, and he is hopeful that Adidas will soon put those guidebooks to use.
"In many developing countries the only way people are able to raise their standards of living is for them to help themselves. Co-ops do just that," said Lestina. "Starting credit unions is one way of allowing workers to save, borrow and receive financial education."
Having helped establish credit unions in Africa during his tenure with WOCCU, Lestina is well aware of the challenges involved in fostering savings and credit coops in other countries, but the Asian market does have one advantage over some of the other countries in which Lestina has worked. "They are more advanced than the other countries I have been in," he commented. "They have a framework to operate a very effective coop."
Although Lestina worked in a number of foreign lands when he was with WOCCU (he left Africa for Wisconsin to take his most recent job as CEO of Heritage CU), he'd already spent a few comfortable years stateside before being asked to spend a couple of weeks in Asia.
A Changed World
"I was a little more nervous [about the travel] because the world has changed so much since my days with WOCCU," he related. "But I felt safe in Asia."
He also knew he was safe to take the time away from HCU to take on this project. For one thing, he had confidence in his COO, who headed up the credit union in Lestina's absence, and for another, he knew his board was on board.
"I have a board that recognizes the importance of the credit union movement and the importance of reaching out to bring the gift of credit unions to other parts of the world," he offered.
And there's some take-home value for Heritage, as well, in the form of a "rejuvenated" CEO.
The mission to Indonesia and Thailand, he said, makes him all the more dedicated to serving the underserved back home. "There's a needy area in Rockford, Ill., that we serve, and we'll be establishing another underserved area soon. The need may be less here [in the U.S. compared to developing countries], but there is still a need."
There's also a need for credit unions to let the public know more about how CUs try to meet these needs.
"These things we do in the credit union movement, like going to other countries to give the gift of credit unions, we need to tell the public more about it," he suggested. "We need to show our not-for-profit dedication, show how we serve the underserved, show what we really are made of and what we do."