TALLINN, Estonia—A delegation of Virginia credit union officials
spent a week in Estonia in August working with the country's growing
credit cooperatives. Participants described the 13 cooperative
financial institutions as small, but with a determined eye toward
continued growth and expansion.
The delegation was the first
to visit the Baltic country of 1.3 million since the Virginia Credit
Union League (VCUL) and the Estonian Union of Credit Cooperatives
signed an agreement in April as part of World Council of Credit Unions'
(WOCCU) International Partnerships Program. The WOCCU program brings
together credit union movements from around the world to exchange ideas
and technical expertise.
Rick Pillow, VCUL's president and
CEO, said the Estonian credit union movement is faced with a variety of
general issues, including the need for legislative advocacy, strategic
planning, disaster recovery and marketing. They struggle to win
deposits, a situation exacerbated by the lack of a deposit/share
insurance fund and the fact that most of the 13 Estonian credit
cooperatives are located in rural areas, home to only 30% of the
nation's population. Other pressing concerns are the need to strengthen
and expand Estonian league services and a lack of diversity in the
financial cooperatives' lending portfolios, which is largely
agricultural in nature and secured by real estate holdings.
"We've been quite impressed with the passion we've seen from those
involved in the Estonian movement," Pillow said. "There is a real
commitment to the cooperative ideal and principles that all credit
unions cherish, and we've been amazed at what these cooperatives are
able to accomplish in service to their members."
to Pillow, the Virginia delegation included David Miles, VCUL's senior
vice president of credit union development; Juri Valdov, Northwest
Federal Credit Union's senior vice president of external affairs; and
Joe Thomas, Fairfax County Federal Credit Union's president and CEO.
The executives toured several credit cooperatives and made
presentations on credit unions and the U.S. movement to 30 credit
cooperative and Estonian government officials during their visit.
Estonia's credit cooperatives had a proud tradition prior to the
country's occupation by the former Soviet Union, according to Valdov.
Currently, those same credit cooperatives are struggling to establish a
foothold in the financial services market, which today is dominated by
Scandinavian banks. Estonian credit cooperatives control just 1% of the
country's financial services market, he added.
much potential and commitment to the same cooperative ideals that
launched the American credit union movement a century ago," Valdov
said. "I think this is an ideal partnership for Virginia's credit
unions because it offers us the opportunity to reaffirm and reconnect
with those basic principles that represent the foundation of our
movement. I believe we'll gain as much from this partnership as our
Based on conversations with the
supervisory and credit committees running the cooperatives, delegation
members saw a real desire for Estonia to expand its cooperative
movement, Thomas said. "It's evident that there is also a deep
understanding of cooperative principles and real dedication to the
philosophical ideals of credit unions. Those currently involved in
Estonian credit unions really get the fact that this movement is about
our members, about our communities and about serving both [groups] with
passion," he added
Pillow also noted that the delegation's
visit, held during the country's celebration of independence from
Soviet rule, Aug. 20-21, had been especially productive. Delegation
members witnessed basic cooperative operations firsthand through local
visits. The largest cooperatives hold between US$150,000 and US$250,000
in assets, with services limited to basic savings and loan transactions
on a cash basis. Estonian credit unions are currently unable to offer
credit or debit cards.
"It was a fascinating and inspiring
trip," Pillow said. "We see a movement beginning to find its footing
and truly determined to grow. I think there are real opportunities for
Virginia's credit unions to help the Estonian movement realize its
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