Estonia’s Credit Unions Dedicated to Growth, Virginia Delegation Discovers

Released Jointly with the Virginia Credit Union League

September 11, 2008

 2008_09_11_VCUL Visits Estonia
Andrus Ristok (center), head of the Estonian Credit Union Association and Rick Pillow (right), president and CEO of the Virginia Credit Union League, examine financials at Kambja Savings and Credit Cooperative in Kambja, Estonia, as Linda Sossi, credit union CEO and chair, looks on.

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."

In addition 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.

"There's so 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 Estonian friends."

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 aspirations."

World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.

World Council has implemented 300+ technical assistance programs in 89 countries. Worldwide, 68,882 credit unions in 109 countries serve 235 million people. Learn more about World Council's impact around the world at

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Contact: Lewis Wood
Organization: Virginia Credit Union League
Phone: ext. 629

Contact: Rebecca Carpenter
Organization: World Council of Credit Unions
Phone: 414-745-8060