WASHINGTON—More than one-third of U.S. credit unions now offer member business loans.
Callahan & Associates reported that its analysis has found 34.4% of U.S. credit unions offer member business loans (MBL), as of September 2015. This is up 86 basis points from September 2014.
The same analysis found that MBL outstanding balances topped $50.9 billion, up 12.29% year-over-year from September 2014. Although member business loans are growing in size and popularity, these loans account for only 6.5% of the total industry loan portfolio, the second smallest loan product followed only by credit cards.
Credit unions across all asset ranges and geographical regions topped the charts in MBL growth in the third quarter. The top 10 are listed below.
“Credit unions participating in member business lending outperformed credit unions that do not offer member business loans across a variety of metrics, including return on assets, delinquency, and member and share growth” said Director of Industry Analysis Sam Taft. “The most notable difference is loan growth. Credit unions that participate in MBL expanded their total loan portfolio 11.8% annually, compared to 6.2% for credit unions that do not.”
Callahan’s reported that business loan penetration at credit unions currently stands at .22%.