The two associations, representing credit unions in their respective state and country, have been working together to restore and build the non-profit cooperative financial system in Estonia. In their most significant step toward that goal, they joined with information technology company, Mindware, three Estonian credit cooperatives, and two individuals to form the Baltic Services Company.
This new company's mission will be to establish a clearing system to provide credit cooperatives in Estonia, and possibly elsewhere, with access to the central banking system in Eastern Europe. With such access, credit cooperatives will be better positioned to offer checking, ATM and card services, and eventually expand into online banking.Juri Valdov, retired CEO of Virginia-based Northwest Federal Credit Union, was elected Chairman of the new corporation and Andrus Ristkok, who currently heads the Estonian Union of Credit Cooperatives, was named Chief Executive Officer.
Valdov praised the group for its vision and committed that the new company will provide services essential to the growth and future viability of Estonia's credit cooperatives.
Ristkok has arranged a Baltic summit for June 22, where the leaders of credit cooperatives in Latvia and Lithuania will meet to discuss joining the Baltic Services Company.
Estonia's small, but growing, credit cooperative system presented the technology plan that led to the Baltic Services Company during a visit to Virginia last year . Representatives of Estonian credit cooperatives noted that access to Eastern Europe's central banking system was essential if they were to compete against the Scandinavian banks that currently dominate the Estonian market.
Members of the Virginia League's Partnership Committee are visiting Estonia this week for a series of meetings on the Baltic Services Company; partnership initiatives between credit cooperatives in Estonia, Latvia and Lithuania; and on-site visits to four Estonian credit cooperatives.
The Virginia Credit Union League and the Estonian Union of Credit Cooperatives have been partnered since 2008 through the World Council of Credit Unions' International Partnerships Program, which brings together credit union movements from around the world to exchange ideas and technical expertise with the goal of building stronger institutions for the benefit of their members.
Estonia has a proud credit union history, with the first financial cooperatives having been founded in 1902, pre-dating the American movement. At its height in 1939, the Estonian movement boasted 184 financial cooperatives and had a 52% market share. After the Soviets occupied the nation in 1940, credit unions were abolished. During Perestroika, credit unions were again legalized, and the first new Estonian credit union was formed in 1990. At present, the nation boasts 18 credit cooperatives, which hold $16 million (U.S. dollars) in shares.