South Korea’s Credit Union Movement Celebrates 50th Anniversary
September 07, 2010
|Participants in WOCCU's December 2008 visit to South Korea included (left to right) CUNA Mutual Group's Paul Treinen, NACUFOK training center director Kwangtaek Choi and WOCCU's Dave Grace.|
SEOUL, South Korea — Today the credit union movement in the Republic of Korea celebrated 50 years since the country's first credit union was established by 27 hospital employees in 1960. The movement's unified and collaborative development approach has fostered its rapid growth to nearly 1,000 credit unions serving 5 million members, making it the world's third largest.
The most visible byproduct of the credit unions' efforts is a marketing program that positions the cooperatives under one common brand and set of values: self-help, self-reliance and cooperation. South Korean credit unions still operate as individual, member-driven financial cooperatives, but their position in the markets they serve rival those of the largest banks. With common signage and similar products and services, they maintain a distinct member service approach. Cooperative movements in Brazil and Poland, among other countries, have also found the approach remarkably effective.
"South Korea's credit unions serve as an excellent example for credit unions around the world of how a collaborative and unified approach to both front-office and back-office operations can truly propel an entire system to new levels of efficiency and reach economies of scale," said Barry Jolette, World Council of Credit Unions (WOCCU) board chair and CEO of San Mateo Credit Union (Calif.). "The Korean movement has made tremendous progress since its founding, and I know they will be celebrating their outstanding success for a long time to come."
The South Korean credit union movement began as a two-tier system as it is today, with individual credit unions being direct members of the National Credit Union Federation of Korea (NACUFOK). In 1988, the movement restructured, leading to a nine-year stint as a three-tier system with another level of association in between the credit unions and NACUFOK; similar structures are found in the United States and in several other countries. The movement restructured again in 1997, reverting back to its original two-tier organization. This change led to greater cohesion and collaboration among credit unions in their move towards a more unified brand.
In October 2000, all credit unions in the country became connected through an online system, and at year-end 2008, credit unions began using a single centralized IT system to run operational software and store credit union data. This strategic approach to technology, a daunting proposition for many credit union movements, is one of the key components of the collaborative approach that characterizes South Korea's credit unions. Shared technology is just the latest collaborative effort that has helped South Korea's credit union movement grow, according to Dave Grace, WOCCU's vice president of association services.
"Credit unions in many countries are looking for ways to centralize operations and gain national brand recognition without sacrificing local ownership and the member service touch," Grace said. "Credit unions around the world can be proud of the great success that the South Korean movement has achieved in finding that balance and effectively serving its membership over the past 50 years."
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, 60,657 credit unions in 109 countries serve 223,000,000 people. Learn more about World Council's impact around the world at www.woccu.org.