RESEARCH

Current Research Programme and Latest Publications

Summary of Proceedings, Conference 21 May 2019

This is a brief record of the presentations and discussions that took place at our Successful Lending conference, in Dublin. Over 90 delegates from England, Ireland, Northern Ireland, and Scotland came together to share experience and best practice in meeting the borrowing needs of credit union members. The report can be downloaded here or by clicking the image to the left.

At the end of an information-filled day, Dr Paul Jones, Director of Research, noted some of the themes that had emerged, including the importance of:

  • Good analytics to evaluate and anticipate the needs of members
  • Rigorous analysis of loan performance to reveal effectiveness and profitability service delivery
  • Realising that much can be done to improve loan products and delivery within current legislative and regulatory constraints
  • Speed, efficiency and convenience of loan application and delivery channels
  • Ensuring our credit unions have a modern, digital suite of services to compete effectively
  • Working with Government and the regulator in the respective jurisdictions to ensure that legislation and regulation in relation to lending is fit for purpose.

Thanks to everyone who joined us. The credit union conference presentations are available here and the Registry’s here.

Where does the CEO’s time go? Presentation of survey results

Earlier in the year, CFCFE members raised two issues that we decided to investigate through a survey. The issues were:

  1. The time and effort they spend managing regulatory and compliance issues, and
  2. The difficulty they have in cutting through day-to-day administrative tasks to focus on the future and moving the organisation forward.

The survey questions sought to bring out the information necessary to understand the scale of these issues across CFCFE members and other large credit unions in Britain and Ireland. We invited 62 CEOs from credit unions in Britain and Ireland to complete the survey, and received 44 complete responses (27 CFCFE members and 17 non-members).

The findings report can be downloaded here, or by clicking on the picture to the right. We present the findings largely without analysis, as they speak for themselves. The headlines we would draw attention to are:

  • CEOs believe that lending and technology are the most pressing issues facing their credit unions
  • CEOs spend more time on day-to-day administration than they would like, and the most important activity to suffer is strategy and planning
  • The majority of CEOs actually consider the time they spend on compliance to be reasonable.

This report will be of interest to CEOs looking to understand peer perspectives, boards wanting insight into CEOs and compliance, and policy-makers seeking to understand how credit union leaders are managing their requirements. If you have any comments on this report, do contact us via info@cfcfe.eu.

Measuring the ‘Credit Union Difference’ – a new Toolkit

The credit union difference is in part reflected in its social impact. A new Toolkit has been developed to enable credit unions to identify, measure and report on this.

The Toolkit is the result of a collaboration between Small Change, CFCFE and Liverpool John Moores University’s Research Unit for Financial Inclusion, funded by the Esmée Fairbairn Foundation, CCLA and CFCFE members. The project team worked closely during 2018/19 with GB credit unions to develop the materials, in particular CFCFE members Hoot Credit Union (Bolton) and Unify Credit Union (Wigan). The Toolkit comprises a Guide to reporting, a Framework spreadsheet to capture information systematically and Facilitator slide pack for leading a workshop on the process. This is a work in progress, and we aim to refine the Toolkit by working closely with more credit unions in the coming months.

For more information, click here or on the picture.

Summary of Proceedings, Members Conference 18 January 2019

This is a brief record of the presentations and discussions that took place at our recent conference in Manchester, attended by 100 delegates from the movement in England, Ireland, Northern Ireland, Romania and Scotland. The report can be downloaded here or by clicking the image to the right. The themes were Collaboration and Communities, with presentations from several practitioners.

A number of key points, practical insights and learning outcomes emerged during the day. At the close, Dr Paul Jones, Director of Research, picked out just a few, including the importance for collaboration of:

  • Clarity about business outcomes
  • Good and effective governance – and the role of the board in driving collaboration
  • Coping with the loss of autonomy
  • Recognising that there is not one sole path to collaboration – there are multiple models and approaches
  • Developing relationships based on trust.

And in relation to ensuring the social and economic difference of credit unions, Paul stressed the criticality of:

  • Ensuring a culture clearly based on co-operative values and principles
  • Communicating those values and principles to the membership and the community.

Paul ended by thanking all participants for coming to the conference and making the day such a success. Go raibh míle maith agaibh! Mulţumesc mult!

Further conference materials, including presentations and brochure, are available here.

The Remuneration of Credit Union Directors, December 2018

This is a ‘hot topic’ in more ways than one. Historically, directors on credit union boards have not been paid, and this remains a strongly-held principle for many credit unions in Britain; in Ireland it is not permitted by law (apart from an honorarium for the treasurer). In Britain there has been a trend in recent years to bring one or more senior executives onto the board as directors. More recently, against a backdrop of increasing operational scale and complexity as well as regulatory demands, a small number of British credit unions have introduced or are considering introducing remuneration for directors who are not executives (traditionally, elected from the membership). This remains a contested issue.

Our paper does not explore substantively the pros and cons of this approach, but is aimed at credit unions who are seeking a robust and appropriate approach to setting the level of remuneration of directors. The report draws together lessons and best practice from credit unions, co-ops and financial services mutuals in Britain, and from credit unions in North America. The paper is based on a 2017 study, subscribed for by a CFCFE member credit union to inform thinking on its board. We provide some conclusions and recommendations for developing and implementing a director remuneration policy consistent with credit union principles and values. Click here or on the image to download the report.

Borrowing from a Credit Union: Messages from Members, September 2018

We are now making this short report publicly available here (or by clicking the image), following circulation to members in September. The paper summarises survey and focus group data from two large credit unions on the member experience with borrowing from their credit unions. It also includes mini-case studies on the initiatives and practices of five other credit unions who have been notably successful in getting loans out to members. All seven of the credit unions are CFCFE members, and we are grateful for their assistance in producing this report.

The paper offers actionable insights that credit unions can consider in developing their own lending strategies.

The Business Case for a Credit Union Central Finance Facility, August 2018

Movement-owned central finance facilities (CFFs) have been key to the success of credit unions around the world. Basically functioning as a ‘credit union for credit unions’, CFFs use the aggregate scale and buying power of the movement as a whole to obtain the best rates safely possible on investments, to assure credit unions of dependable access to liquidity at wholesale borrowing rates, and to employ the professional expertise to do so safely and profitably. Using case studies from the US, Canada and Australia, this paper shows how CFFs were instrumental for credit unions to evolve into full-service financial providers. The paper suggests possible ways forward to creating CFFs in Ireland and Britain, where they do not yet exist.

This paper is now available here for download.

Lessons Learned by US Credit Unions in Mortgage Lending, June 2018

Over the past 40 years home mortgages have grown to represent about half of credit union lending in the States. This paper was developed in the belief that the US experience would provide useful insights to credit unions over here that are looking to expand into the mortgage market.

Major lessons learned by the Americans: the need to mitigate interest rate and diversification risks by creating collaborative support companies to interface with secondary mortgage markets, obtaining affordable liquidity from credit union-owned central finance facilities, hiring and retaining staff with specialised mortgage lending skills, and developing win-win relationships with local estate agents (the major influencers of where people go to finance their new homes).

The paper is available here for download.

The Revolving Credit Opportunity for Credit Unions, June 2018

This project is a ‘think / do’ paper on revolving credit as an opportunity for credit unions in Ireland and Great Britain. Revolving lines of credit are a core service of credit unions in other countries, notably Australia, Canada and the USA. This paper identifies the operational, regulatory, risk and other factors that are unique to revolving credit and suggests practical steps for dealing with them.

Our primary conclusion: revolving credit has the potential to largely replace the current practice of top-up lending, with far greater convenience to members and at lower administrative expense to the credit union.

The report is now available to download here.

The Irish Credit Union Business Model: Is it still fit for purpose? November 2017

Our first publication was a review of the business model for credit unions in Ireland, and the case for change.

The key messages are that: the objective evidence demonstrates the case for change to the existing business model, international examples show an expansion of the proposition to members is a successful model, and that collaboration within the sector will be required to build the necessary capability. But first, we need a shared vision of the future, and an appetite for change.

It is available for download here, or click on the image of the report.

We welcome feedback and comment on all our research; contact us here.

We have developed a research programme in consultation with our members. Projects include:

  • An analysis of credit unions’ role in the community, and a methodology for measurement of community and social impact, in partnership with Small Change, experts in social investment and social finance
  • Priority modernisation changes to primary legislation in the Irish and British credit union acts.
  • Best practices for effective collaboration among credit unions
  • Financial literacy and governance for social inclusion, in partnership with Romanian and Italian co-operatives and credit unions, a two year, EU-funded programme concluding in late 2019

Previous Publications

The directors, through their other institutions, have previously collaborated on several important projects. Some of those from the Research Unit for Financial Inclusion at Liverpool John Moores University are available here for download by clicking on the images below. Most recent examples are an exploration of best practice in governance for credit unions (2017 – updated work to follow from the Centre in 2019) and a study of the credit union experience of GB’s Credit Union Expansion Project (2016). The earliest is the seminal paper by Dr Paul A. Jones and others on sustainable credit union development in Britain from 1998.

Further reports published by the Research Unit for Financial Inclusion are also available; contact us for further information.

Research approach

We aim to publish academically rigorous research papers and other outputs that will be of practical and actionable help to the Centre’s stakeholders, for them to identify and adopt new services, better engage their communities, improve their business practices, protect their values, mitigate the risks they face, and facilitate their collaboration for the common good.

We wish to be a thought leader in our field.

We collaborate with Members and other stakeholders to the greatest extent possible, to ensure that ideas and concepts are tested and proven.

We have a Research Advisory Board to support the Centre with its research methodology, standards and quality, and oversee peer review of publications.

We make our research available first to our members, and then to the public.

SCOPE

Our subjects include co-operatives and mutuals (such as credit unions), social enterprises (such as the UK’s community finance development insitutions) and co-operative banks and building societies, as well as social businesses in other sectors that engage with community finance (such as housing associations seeking affordable credit to residents). The Centre’s current focus is Ireland and the United Kingdom, but in due course we will undertake research across Europe. In all cases, our work is informed by experience and knowledge from around the world.

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OUR RESEARCHERS

We engage academic, professional and practitioner experts who are recognised for their expertise, integrity and quality of work in Centre-relevant areas. The Centre has a special, collaborative relationship with the Research Unit for Financial Inclusion at Liverpool John Moores University. Certain research papers and publications will be published in collaboration with the University.

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PROGRAMME

We select research projects in consultation with our members, funded by subscription and / or external grants, and seek to engage and work with similar organisations throughout Europe and internationally. We are happy to discuss projects brought to us by interested third parties such as academics, consultants or sector agencies.  Please contact us if you wish to discuss a research project partnership.