Credit unions have been around for some time now. The main goal of this kind of cooperation is to provide a loan for the members when they need one and promoting thrift for the members. A loan is highly sought after, but many people are denied one if they have not established themselves yet. Members of the group can avail of said loan or something similar to this of a smaller scale if they have dutifully established themselves in the group and showed that they can and will pay back said loan. Credit unions also encourage their members to open savings accounts with them in order to encourage to save and have some sort of alternate funding.
One of the major differences that these groups have from banks and other financial institutions is the fact that the members of the said group are themselves the owners of the credit union. This means that those who have accounts in the institution have the right to know what is happening to the finances as well as vote for the board of directors.
The voting is also different from other institutions in the sense that all members of good standing can vote and each member is entitled to one vote. The votes are based on membership rather than on the amount of investment and clout that a person may have in the credit unions. Another significant difference that these have from other financial institutions is that one needs to be a member of the said group in order to avail of the services that they offer.
For loans, a person needs to be a member of the group to get one, and the same goes for a savings account and other kinds of accounts. These establishments are also labeled as a not-for-profit group, which means that they primarily operate for the common good of the members and not for profit. This implies that loans and other borrowing activity will be charged at a much lower rate than banks. The same goes for other services that they may provide for their members.
The members of the credit unions from all over the world benefit from joining or investing in these groups. Their benefit is having an almost immediate loan from said establishment as long as he or she is in good standing. The interest rates of these loans and accounts may also be more beneficial compared to other financial institutions. The members also have a say with regards to the condition and state of the group as well as the goals of the cooperative in the near future.
These are just a few of the services that credit unions offer their members. Many have other services much like those from banks and other financial institutions.