Credit unions play a key role in the provincial economy
WINNIPEG, Manitoba (March 18, 2010)—Operating in the extremely competitive financial services industry, a sector faced with many challenges over the past year-and-a-half, Manitoba’s credit unions continued on a path of strong and steady growth in 2009. Their combined deposit, loan, asset and equity base experienced significant gains and Manitobans opened over 12,000 new credit union memberships over the course of the year.
“As employers and significant contributors to the economies of communities throughout the province, credit unions are an important presence in the business life of Manitoba in and of themselves ,” says Garth Manness, CEO of Credit Union Central of Manitoba, the trade association and primary service provider to Manitoba’s 44 credit unions.
“ More importantly, though, Manitoba credit unions occupy a unique and important segment of the financial institution sector in Manitoba and — through their lending activities to consumers, small and medium-seized enterprises (SMEs), and agricultural producers — are important contributors to the vitality of the provincial economy.”
Credit unions are the number one providers of loans to SMEs and farmers in Manitoba, a statistic that Manness partly attributes to their ability to examine financial details through a community lens. “Knowing the member and the community allows credit union lenders to look at more than just the figures on a loan application when assessing credit risk.
Like all healthy businesses, credit unions are profitable. The difference between credit unions and other financial institutions is what they do with those profits. Credit union profits are used to: increase the equity position (thereby adding financial strength and resilience to the institution); invest in infrastructure improvements (and hire local contractors to carry them out); expand product and service lines, ATM networks and electronic banking options; keep service fees and other costs competitive with other financial institutions; and provide loans at rates that enable more people to purchase houses, consumer goods and automobiles, invest in their businesses, and expand their operations. Most credit unions share some of the remaining profit with members through patronage dividends or fee rebates, while others build profit sharing into their fees and interest rates so members pay less or earn more the whole year.
Further evidence of the success and growth of credit unions is their physical presence . There are currently 23 more credit union branches in the province than there were 10 years ago, and in 68 of the 118 communities in which they operate, a credit union is currently the only financial institution available to local consumers, businesspeople and producers.
“This is all the result of our co-operative structure,” Manness says. “ Manitoba credit unions are owned by Manitobans and operate for Manitobans. The deposits Manitobans make at credit unions are lent out to other Manitobans, and the continuous cycling of money drives the economies of communities from Gillam to Melita and Sprague to Flin Flon.”- 30 -
Credit Union Central of Manitoba (CUCM) is the trade association for the province’s 44 autonomous credit unions. As prescribed by Manitoba’s Credit Unions and Caisses Populaires Act, CUCM manages liquidity reserves, monitors credit-granting procedures and provides financial and other services to credit unions including banking, treasury, corporate governance, government relations, representation and advocacy, and legal services. As well, credit unions have access to payment and settlement systems, human resources, research, communications, marketing, planning, lending, product/service R&D and business consulting through CUCM. Manitoba credit unions jointly own CUCM and representatives from nine provincial districts sit on its board of directors. CUCM is financed through assessments and fee income derived through its operations. For more information about Manitoba credit unions and Credit Union Central of Manitoba, visit www.creditunion.mb.ca.
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