INDIANAPOLIS—Credit unions in Indiana hosted visitors from credit unions in the Netherlands as part of an exchange facilitated by the World Council of Credit Unions.
Roland Lampe, director of the Association of Credit Unions in the Netherlands (ACUN) traveled to Indiana and met with representatives of the Indiana Credit Union League and several local credit unions, including Forum CU, Indiana Members CU, Riverside Community FCU, Beacon CU, Afena FCU, Via CU and Prime Trust Federal Credit Union – to learn from their experiences in member business lending.
“Only recently did the government approve credit union enabling legislation in the Netherlands, where lending options are limited for SME businesses,” noted the Indiana league in a statement. “Two of the country’s largest banks currently control 80% of the market, and despite government guarantees, SME investment has fallen behind other countries in the region. This situation has the potential to change drastically by 2020, however, thanks to an ACUN initiative to establish 100 new credit unions designed specifically to address the needs of small business entrepreneurs.”
The purpose of Lampe’s visit to Indiana was to explore areas where the business lending processes and procedures refined by credit unions in the United States may be directly applied by newly formed credit unions in the Netherlands, the ICUL said. At each visit, Indiana credit unions shared resources and perspectives on issues critical to this young and growing ACUN movement: compliance and risk management, credit analysis, communication and marketing strategies, internal controls and back office systems. Lampe will now adapt these elements to fit the local culture and compile them into a Toolbox which will guide new credit unions as they are established in the Netherlands.
During several exchanges with hosting credit unions, Lampe noted how “the cooperative structure of credit unions guarantees this customized approach in financing, providing a personal touch to saving and lending, and emphasizing the relationship over the transaction,” the league reported.
“Nearly 99% of companies in the Netherlands are classified as SMEs,” the ICUL reported. “These businesses provide 60% of all employment and power the national economy, however, SME employment has stagnated under the challenges of accessing business lending. ACUN was formed in 2016 to address these challenges by championing the credit union model for financing small business entrepreneurs. To date, ACUN has established 25 credit unions which provide savings and loan services to the SME sector.”
According to the ICUL, an essential component of the ACUN model is the development of a coaching network of entrepreneurs, where loan recipients are assigned a mentor-saver who provides advice and experience which guide the entrepreneur’s business activities throughout the loan cycle. This collaborative structure strengthens the social fabric, reduces loan delinquency, improves planning and preparation for business owners and expands SME employment opportunities.
“We admire Roland’s efforts to help business owners and entrepreneurs in the Netherlands gain access to the benefits of a member owned cooperative lending alternative,” noted Indiana Credit Union League CEO John McKenzie, who facilitated the visits with local credit union CEOs.
“By focusing on the human factor through coaching, credit unions in the Netherlands are at the forefront of financial services for the common good and are creating a sustainable and solid structure for lending to SMEs,” Lampe said.