What is a credit union?
A credit union is an organization that brings together a certain number of people and unites them into one community which aims to bring together their savings. The aim of such an organization is that savings and borrow from each other, and thus primarily to help members of the credit union works accomplished certain goals. The objectives may be different, in order to purchase real estate, the creation of small and medium enterprises, and so on.
Credit unions are non-profit organizations of their greatest distribution in the United States with total assets of over 100 billion dollars.
As we said a source of funds from credit union members deposit. Placement of funds is geared towards short-term consumer loans, Credit Union also perform other services in the field of crediting the card, exchange transactions, insurance, lending and allocation of financial aid to their members.
Regardless of the size of the accounts in credit unions, each member may initiate a voluntary board of directors and voting in elections. In some countries, members meet for the first time with the democratic decision-making through their credit unions.
Members of a credit union board of directors choose from among its members. Each member gives one vote for the election of the board, regardless of their level of savings or shares in a credit union
History of credit unions
Credit unions were created in the mid nineteenth century in Germany under the leadership of cooperative pioneer Hermann Schulze-Delitzschsa aiming to poor people come to credit on favorable terms.
Weaknesses of credit unions
The basic weakness of credit unions is mutual association members and a small amount of resources at its disposal. This increases the operating costs and not allowing them to offer a wide range of services. Therefore cannot apply to banks and other non-depository institutions.