I attended the Northern Money Conference, organised by the Co-operative Bank, ABCUL and Dr Paul Jones from Liverpool John Moores University in Liverpool on 5th June. I especially enjoyed presentations from Cyrenians and Unlock on Reaching Out to the Financially Excluded. It was interesting to hear a briefing from DWP on their plans for supporting the modernisation of credit unions and personal lending CDFI’s. However, it was a little disappointing to hear an old debate re-occurring during the conference.
On the one side, there are those who believe that for the credit union movement to survive and thrive, it needs to grow, moving towards providing full-service banking and attracting in more middle-class members. “No more poor man’s bank” is the cry.
One the other hand, some credit union members, staff and committee members want credit unions to keep their focus on tackling financial exclusion, staying close to their local communities and maintaining a very personal service. Internet banking and credit scoring are seen as not what credit unions are about.
I’m a little tired of the argument, partly because I’ve already been through it with CDFI’s, charities and social enterprises. The balance between sustainability and social impact is part of the challenge of working in the third sector – what makes it interesting.
If organisations are not efficiently managed and sustainable, they won’t be around for the long term, to make a real difference. However, efficiency and sustainability are not goals in themselves. We want credit unions and CDFI’s to survive and thrive so that they can deliver their social impact. The DWP evaluation of the Growth Fund confirmed that they do reach and work with people who are excluded from mainstream banking services. The problem is that they don’t yet reach enough of them. The DWP challenge is to double their membership.
The lesson that I’ve learned over the past twenty years is that it is not a case of either efficiency or social impact, it’s a case of BOTH. So can we all agree that we want credit unions and CDFI’s to grow and develop so that more people can avail of ethical financial services, especially including those in poorer and excluded communities?