The Development of Credit Unions and their Role in Tackling Financial Exclusion’

In recent years, policy-makers have viewed credit unions as an important tool in the fight against financial exclusion. This article reviews government policy toward credit unions, and the extent of credit union involvement in areas of financial exclusion (deprivation). Government policies of financial assistance, financial de-regulation and re-regulation have encouraged the development of a sustainable credit union industry capable of serving the financially excluded. However, this external funding rather than stimulating credit union development may lead to an erosion of the community self-help ethos upon which credit unions were founded. Policies should therefore be formulated which encourage credit union development based upon a membership drawn from a cross section of the population