Bornette Donaldson | Credit unions as economic superheroes

Credit unions play a vital role in enhancing economic development, promoting financial inclusion for underserved populations, supporting small businesses, and contributing to systemic resilience and financial stability.

They aren’t just financial institutions; they’re economic superheroes, putting people before profit and changing the rules of the financial game.

Across the globe, more than 411 million people in 104 countries belong to a credit union, collectively managing a jaw-dropping US$3.7 trillion in assets, all shaped by members for members.

In the contemporary global economy, issues of inequality, financial exclusion and systemic instability remain pressing. Credit unions represent a distinctive form of financial institution that is focused on member ownership, member participation and democratic governance rather than profit maximisation. Originating in 19th-century Europe, they have expanded globally to serve a diverse group of members.

A fundamental value proposition of credit unions is their role in extending financial services to underserved and marginalised groups. Credit unions’ emphasis on community ownership creates strong trust relationships that encourage responsible financial behaviour and facilitate asset accumulation.

Imagine a world where banking is truly for everyone, credit unions make this vision a reality. Whether bringing safe savings accounts to farmers in rural Kenya, helping a young student in Mexico pay university fees or funding community projects in the Caribbean, credit unions break down barriers that would otherwise keep billions out of the mainstream financial system, as noted by the International Monetary Fund in 2012.

In Jamaica, one of every three citizens is a credit union member, contributing to more than $200 billion in assets within the credit union system as of May 2025, fuelling dreams and powering local communities.

In Barbados and St Kitts and Nevis, more than 80 per cent of the population belongs to a credit union. Thanks to their low fees and smart lending, credit unions help members become homeowners, entrepreneurs and college graduates at rates banks struggle to match.

Credit unions supercharge small businesses and local projects, acting as a springboard for innovation and job creation. In the United States, Community Development Credit Unions manage US$327 billion, directly investing in small businesses and local communities. In Kenya, SACCOs, short for savings and credit co-operatives, boost agriculture and rural growth, building bridges to prosperity for countless families.

Even where regulations may limit direct lending to businesses – as in Jamaica – credit unions still support small business owners with critical liquidity, during times of need.

Here’s what makes credit unions truly unique: every member is a co-owner and decision-maker, from the retiree saving for their grandchildren to the local grocer expanding a shop. With ‘one member, one vote’, democracy comes alive in every meeting, keeping control local and giving every voice power, as noted by the Jamaica Co-operative Credit Union League. Jamaican credit unions tap the league for liquidity support and other essential services, showing how teamwork leads to success and resilience.

Credit unions are leading the charge for sustainability globally, funding green energy, safer homes and climate action right where it matters most.

During the 2008 financial crisis, while big banks faltered, credit unions stood firm, avoiding risky loans and supporting their communities through the storm. In Jamaica, they survived the financial crisis of the 1990s with much less disruption than banks, and now, after years of mergers, continue to thrive and serve over one millions members.

Surpluses aren’t pocketed by executives, they go back to members and the community, building wealth where it’s needed most. Financial literacy programmes run by credit unions help members prepare for the future and weather economic storms.

The journey isn’t always smooth. Credit unions tackle tough challenges like regulatory shifts, the race for digital modernisation and the need for ever-stronger governance. Forward-thinking reforms, modern technology and new ways of managing money are paving the road to even greater impact. In Jamaica, legal reforms, continued digital innovation and fresh ideas are helping credit unions stay competitive and effective.

Credit unions prove that financial services can be ethical, inclusive and transformative, aligning money with the needs of people, communities and the planet. Their cooperative spirit, democratic governance and strong commitment to economic empowerment make them engines for change and stability in a globalised world.

With ongoing policy support and investments, credit unions will continue to blaze trails toward a more resilient and inclusive economic future.

Bornette Donaldson is an economist, director at The University of the West Indies, Mona, and board member at several Jamaican co-operatives. bornette.donaldson@gmail.com.