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20 October, 2005

Glasgow University

"Credit Union, an International Model of Social Inclusion"

{The following is a transcript of the speech delivered by John Hume}

Introduction

It is a real pleasure to be invited to speak here in Glasgow University and a particular honour to deliver the inaugural Bert Mullen Lecture. There is nowhere that I would rather be than among credit union people and, particularly this evening on International Credit Union Day, when we co-celebrate with millions of other members in over 100 countries across the World.

From what I have learned about Bert Mullen and from what the League President has said in his introduction, it is clear that Bert Mullen was one of those precious individuals whose vision had the ability to inspire, change and transform the lives of those around them. Throughout its history, the Credit Union Movement has been fortunate to have the support and energy of people, men and women, whose thinking, energy and commitment have made it a vital economic force in the lives of families, communities and whole nations.

In the course of this address, I would like to trace for you the impact of some of these people on the Credit Union Movement, their lasting influence on its development and to illustrate how their resourcefulness has been a potent catalyst for life change at different times and in various places around the World. They combined a sound mixture of idealism and practicality with a driving ambition to provide vital social and financial services to their communities. The principles that underpinned their thinking and, which have evolved from their work and in the practice of credit union, remain constant in the movement today; the upholding and implementation of those principles has ensured world-wide recognition of credit union as a hugely successful financial co-operative with enduring power to effect change.


Beginnings
The earliest societies reflected evidence of co-operative development; interdependency and the sharing of skills and resources for the common good of the group are well documented. Co-operative credit was born out of the same needs in the context of post feudalist Europe. When small farmers were freed from their obligations to landlords, they found the realities of an individualistic, capitalist economy equally harsh. To capitalise development, even on the smallest scale, they had to turn to moneylenders who charged intolerable rates of interest and exacted a high price when default occurred through crop failure or poor market returns. In the towns, small shopkeepers, artisans and unskilled workers faced the same daunting, economic circumstances.

Not far from here in Lanark, at the beginning of the Nineteenth Century, Robert Owen recognised the grim effects of industrialised labour on family life and particularly on children. I know that opinion is still divided in some circles as to whether Owen was a genuine, social reformer or a paternalistic industrialist. It is not for me to advance an opinion to a Scottish audience but merely to point out that he propagated elements of mutual sharing for the common good of the mill community.

In Rochdale, 28 Lancashire weavers, influenced by the theories of Robert Owen, opened a grocery store that proved so successful that they were went on to establish a co-operative factory and textile mill. Their rules combined a fixed interest on capital with a shared distribution of profits. Both are examples of increased social inclusion; in Owen’s scenario, through wider educational opportunity, and the Rochdale experiment provided greater access to affordable credit. Nineteenth century social reformers wanted to alleviate the financial problems of those on lower incomes, which they believed resulted from the industrial revolution. They also wanted to restore a sense of community as a staple of society. A change in the system of banking was, in their view, essential to alleviate the fundamental problems of the small farmer and local craftsman. Although banking had been around for centuries, even in its most progressive form in the nineteenth century it was mainly concerned with the interests of the large merchant and the producer.


Europe
Practical co-operative credit originated in Germany in the middle of the nineteenth century. An ardent Lutheran, Victor Aime Huber, aspired to create ‘a Christian, communal life, based upon economic reforms with the help of associated activity carried on in a spirit of Christian love’. In 1861 he published a pamphlet, ‘lectures on the solution of the social problem’, which raised topics such as ‘What a union loan may accomplish’ and ‘Credit unions and Loan unions’. While a prime motivation for Huber was his deep, religious conviction that defects of character stemmed from the degrading pressures of poverty, he did not believe that charitable acts would redress the social problems of the poor. He was convinced that self-help through the co-operative movement was the best chance of removing poverty, improving character and eliminating evil.

Huber was essentially a theorist and while his writings were extremely influential in Germany, he took no personal or practical interest in the organisation of co-operative credit institutions. That was left to Hermann Schulze-Delitzsch and Friedrich Wilhelm Raiffeisen.

Following a crop failure in 1846, Schulze-Delitzsch set up a local committee which rented a mill and bakery to purchase grain at wholesale prices to distribute to the needy. He also set up a friendly society for craftsmen to provide co-operative insurance against death and sickness. He established a co-operative purchasing society for master shoemakers to purchase leather for members at wholesale prices. Even with that, he discovered that the society had to borrow funds to make its first purchase and this experience convinced him of the great need for co-operative credit among craftsmen and small shopkeepers.

In 1850 he organised a loan association with an initial capital of around £100, contributed by a group of friends. It was different from previous charitable, loan institutions because borrowers had to join the association and contribute 5 cents a month towards its capital. After initial difficulties, particularly in sustaining the level of capital, he reorganised the association with a set of key principles:

• Each member must pay an entrance fee of around £1.00
• He must commit to paying for one share of around £5.00 through instalments
• Members must deposit their savings in the credit society in order to provide working capital
• Modest dividends would be paid on deposits from the interest revenue on loans
• If the society required additional capital, it should borrow from other financial institutions on the basis of unlimited liability – as Schilze-Delitzsch put it "all for one and each for all"
• Loans were to be made for productive purposes
• Loans would be based on the character of the person rather than on collateral
• Membership would be open to all and not limited to any one occupation or social class;


I will look later at how these basic rules relate to the structure of credit unions today.

Schulze was not concerned with the moral regeneration of mankind; he had no intention of interfering in their private lives or teaching them his morality. Economy was enough for him. He wanted the system to include many more of his fellow men – what we now refer to as social inclusion. He insisted that the society must rest on the sound principles of thrift, self-help and financial organisation. He believed that the first duty of a reformer was to convert himself into a capitalist.

Friedrich Wilhelm Raiffeisen was born in the Rhine Province at Hamm in 1818. In 1846 Raiffeisen became Mayor of Weyerbusch . As with Schulze, he was profoundly moved by the ravages of the famine and hard winters of the years 1846 and ‘47. Where Schulze had tried to assist urban craft and trades people, Raiffeisen concentrated his energies on the farming population. He found that farmers were not prepared for commercial agriculture – they did not have the money to pay for machinery, fertilizer, seeds or livestock in order to increase productivity on their land. Mortgages on land provided the basis for most rural credit but this option was really only open to owners of large properties.

Typically, the small farmer when he purchased land had to resort to high rate moneylenders and loan sharks to for money to buy vital supplies. Records show that some of these moneylenders charged as much as 100% interest. (There are people today in this city and in most British cities, the socially and financially excluded, who are paying an average of 175% to doorstep lenders, according to DTI figures.)

Raiffeisen set up two benevolent societies to support the farmers’ needs. Neither of them was a co-operative. Their capital came from the better off who contributed, inspired by the enthusiastic rhetoric of Raiffeisen. Initially they were successful, in so far as they provided support through loans to some of the poorest farmers at acceptable rates of interest. With time, however, the public-spirited men who had initially contributed began to lose interests as benefits accrued only to the poorest borrowers. Raiffeisen decided, therefore, to re-organise the societies, replacing charity with principles of self-help. Eventually in 1864, he established a new organisation known as the Heddersdorf Credit Union. His organisation differed from Schulze’s on guiding principles; Raiffeisen insisted that brotherly love and Christian ideals motivated the credit union while Schulze was mainly concerned with promoting economic self sufficiency. The membership criteria were broadly similar in both organisations.

In the Raiffeisen version, they were:
• Admission was allowed, if existing members judged the applicant to be of good character;
• No distinction between rich and poor;
• Profits were shared by all – in the early days, these were negligible as the credit unions concentrated on building reserves;
• Token requirement of one share per members (approximately £1);
• Members participated in the annual general meeting – each had one vote;
• Volunteer management to approve loans and generally control strategic planning;
• Supervisory committee acting as watchdog on management and reporting directly to the members at the Annual General Meeting;
• Cashiers could be employed as the society grew but they had no direct role in management


The work of these two pioneers spread across Europe so that early in the twentieth century the co-operative credit movement had a firm foothold in Austria, Belgium, Italy, France, Switzerland, Spain and Denmark. Surprisingly, co-operative credit made little headway in England where the great Rochdale movement had begun. A strong co-operative movement developed among small farmers in Ireland, particularly in the dairy industry. It would be the late 1950’s before financial co-operatives were launched there but more of that later. What emerges is a picture in Europe of growing access to financial services for all people. Social inclusion was happening there through co-operative credit. A sustaining factor in the European co-operative movement has been Raiffeien’s assertion of respect for the individual. The early co-operatives paid a great deal of attention to the personal development and educational aspirations of their members. Credit union was dedicated to supporting the needs of the whole person, their families and whole communities. The term, credit union, is no longer used by the co-operative credit movement but the Raiffeisen principles underpin and sustain a very dynamic, co-operative financial sector which many of you will have observed on European travel such as the Raiffeisen Banks throughout Germany and Austria, Credit Suisse, Credit Mutuel, Credit Agricole etc


North America
The first substantial evidence of organised co-operative credit in North America was the establishment of La Caisse Populaire de Levis by Alphonse Desjardins in December 1900. Desjardins was a journalist who worked on the equivalent of Hansard in the Ottawa Parliament. As a journalist, he was acutely aware of the economic and social problems of his fellow citizens. He was a robust Canadian nationalist and, at a time when political debate centred largely on provincial autonomy versus national unity and even closer ties with the U.S., he was dedicated to making Canada a better place for all its citizens.

Desjardins had studied social science and economics and had learned of the advances being made in Europe by the co-operative movement. He wanted to adapt these successful structures to a Canadian context. The denial of adequate banking facilities to the common wage earner, which forced them to resort to extortionate money lenders, affected him deeply. As a parliamentary reporter, he heard the pros and cons of a debate around a bill to outlaw usury; he was particularly moved by the story a man who had been charged 1200% interest on a small loan. He resolved to try to do something to provide accessible, financial services for ordinary, working people. He spent a great deal of time on research, writing to people in Europe who were involved with the co-operative movement there – among them Henry W. Wolff, the noted writer and promoter of people’s banks in Europe and Charles Rayneri, director of the banque populaire in Menton, France and Luigi Luzzatti, the Italian co-operative activist. The more he learned, the more convinced he became that he had to push for a similar institution to be established in Canada:

“the local circumstances are of such a character as to completely warrant me to go into the enterprise with the conviction that it will confer a great benefit on the people, who, not being in a position to go into ordinary banks, are obliged to subscribe to the terrible conditions imposed upon them by private moneylenders” Desjardins decided that his bank should differ from those in Europe in two ways He abandoned the dichotomy between urban and rural credit societies because the same need for social inclusion was evident in both. Secondly he did not accept the principle of unlimited liability which was zealously supported by Wolff. He recognised that he would never have gathered volunteers, had they been required to commit to that principle

Initially progress was slow; Desjardins conducted the lodgements in his own home on a voluntary basis – at first for one night per week, increasing to three. That’s a scenario that many of you in this audience will identify in your own experience of the early days of your credit union. Pat and I have vivid recollections of posting lodgements to share and loan ledgers late into the night in our own home in Derry after our young children had been put to bed. The antecedents of the procedures still practised in the modern credit union were clearly discernable in the Levis caisse

• Any urban or rural resident of the Levis area had to purchase a $5 share, payable in instalments
• To borrow, a member had to be in good standing
• To have repaid previous loans and not be in arrears on a current loan
• A committee was elected to consider applications and grant loans
• Members only had one vote, regardless of their shareholding
• Reserve fund was built up from profits on loan interest
• Remainder of profits after expenses returned to the members


This was the model of a not-for-profit, self-help organisation which continues to provide access to affordable, financial services for millions of people in over 100 countries. In the absence of this provision, they would have to resort to high cost borrowing from moneylenders and loan sharks. By 1914 there were 150 co-operative banks in Canada, serving urban workers, farmers and miners. Desjardins, speaking of the Caisse, told a committee of the House of Commons (Canada): “The poor people are brought up to an astonishing level of education so far as economics are concerned. They know what is the nature of capital. They know its relation to the rest of the social life and in that way a good deal of prejudice is abated…..you will find that it has taught people the great advantages of economy, thrift, saving and, above all, it has taught them the value of the cents and the small savings.”

Credit Union, or co-operative finance, developed slightly later in the United States due to the influence of an unlikely figure, Edward A. Filene, a prosperous Boston merchant in the early twentieth century. Filene did not consider himself a particularly moral or good person but his merchandising and employment practices were enlightened. He insisted that the customers should get full value for their money, he paid good wages and introduced industrial benefits that were far in advance of their time – restrooms for relaxation, a subsidised cafeteria, a savings and loan club, paid holidays and free medical care.

He lived a fairly frugal and modest life, characterizing himself as a shopkeeper from Boston. One luxury that he did permit himself was travel which he did widely, not just to purchase merchandise and study business practice but also to pursue an interest in national and international economies. He was particularly interested in European co-operatives and corresponded frequently with its principal supporters. Increasingly throughout his life, Filene sought to combine knowledge and money to improve the lot of people. He was not a revolutionary but a progressive reformer. He worked for what he considered to be the public good; he did not believe that individual acts of charity could solve many problems and and so he supported research into the causes of poverty, disease and social distress.

During a visit to India in 1907 he met a Scot, William Robert Gourlay, a graduate of this fine establishment and a member of the Indian Civil Service. At the time they met, he had responsibility for the co-operative credit societies in Bengal. Gourlay invited Filene to accompany him on a tour of the districts. The journey provided a remarkable learning experience for Filene; appalled at the destitution that he witnessed, he concluded that ownership of land and access to affordable credit to develop it were key to the survival of the villagers. The working of the co-operative banks and their unpaid, volunteer officers, with which Gourlay was associated, impressed him. He left India with a much deeper understanding of what co-operative credit could do for poor people.

On returning home, he visited President Theodore Roosevelt and related his experience of the Indian agriculture co-operative experience. The seeds for the legislation to permit co-operative credit were being planted at the highest level and were well received. The hard work of drafting it fell to another Bostonian, Pierre Jay, the bank commissioner of Massachussets, who had also long been convinced of the potential of co-operative credit to alleviate the plight of the poor in the United States.

He recognised the crying need for better credit facilities for small entrepreneurs, low wage earners and farmers on limited holdings. These people were frequently forced to borrow from pawnbrokers and moneylenders known as note-shavers. They attracted this soubriquet because of their practice of issuing credit on notes which bore the legal rate of interest but to which they added ‘fees’ for expenses and services which greatly increased the rate of interest. (It’s a practice that is still alive and kicking some unfortunate people, since you will be conscious in recent months of the clearly expressed displeasure of the Treasury Select Committee at the excessive charges and unjustifiable fines inflicted on their customers by credit card companies and some banks.)

Jay looked at some savings and loan schemes which a few employers were operating within their businesses for the benefit of workers. He concluded in a report to the legislators: “The existence of various individual and corporate loaners in every city and in many towns is indisputable evidence that there is a demand for loans that is not being met by the existing banking institutions. Although some of the loans may be improvident, there is little doubt that much of it is the borrowing that comes of necessity”

He concluded by recommending that the legislature should pass a law, providing for the organisation of credit unions under appropriate controls and regulation. Jay had learned of the work of Desjardins in Canada and invited him to Boston to assist with the drafting of such a law. Eventually, the Massachusetts Credit Union Act became law in April 1909. The law required that:
• At least seven persons apply for a charter to organise a credit union
• Once incorporated, a credit union could receive the savings of members in the form of purchased shares or deposits and make loans
• An entrance fee would be required and the minimum membership requirement was a $5 share which could be paid in instalments
• Credit unions would be governed democratically with each member entitled to only one vote
• A credit committee and a supervisory committee would be elected in each credit union
• Loan applications would be decided upon in confidence by the Credit Committee
• Directors and other committee members would receive no remuneration


This remains the basic structure of credit union management and operation across the World nearly 100 years later. That’s not to say that credit union has not evolved in application; it has and technology has been adopted to enhance the quality of service to members. Derry Credit Union is now a fully computerised financial management system and far removed in operation from the early manual days. However, the principles and philosophy have remained constant.

Filene, with his powerful political contacts, linked up with Jay and Desjardin to promote the credit union movement across the United States and Canada. He fully realised that the success of the Credit Union movement depended on the development of the co-operative ideal.

In other words, the spirit behind the organisation and operation of credit unions must be different from that of ordinary, profit-making business. At the same time he recognised that credit unions must employ sound business practices, since a failure of a credit union through poor management and loss of money to the savers would be damaging to the whole movement. He was convinced that if credit unions followed the basic principles laid down in the Massachusetts law that the movement would develop along successful and healthy lines. Perhaps the most important contribution that Filene made to the movement was his appointment of Roy F Bergengren in 1920 to manage the Massachusetts Credit Union Association. Bergengren threw himself into the task with energy and enthusiasm. Its principle of service, the effort to promote thrift and the attempt to reduce exploitation of the poor – all touched his humanitarian spirit. Within a short time he took a small struggling movement and gave it a new life and vitality. A major part of his work was in pushing for enabling and sympathetic legislation for credit unions both at State and Federal level.

By the late seventies there were over 30 000 credit unions in the United States and 6000 in Canada. An American umbrella organisation, CUNA, was formed in 1935 and in 1965 this became a World body with the formation of CUNA International and this in turn was succeeded in 1970 by the World Council of Credit Unions. These structures are merely the mechanisms to ensure the social inclusion of millions of poor citizens across the World by providing access to affordable financial services and control of their credit.


Ireland
The Ireland of the 1950’s was an impoverished place; people were its single biggest export. Many of those who remained at home struggled to survive in the rural areas on small farms or on low wages. Less than 10% of the population had had second level education and just over 2% entered higher education. Small farmers received credit from the local farming co-operative and some traders. In the towns and cities, north and south, there were high levels of unemployment. Many people regarded themselves as second-class citizens and had little confidence or expectation for their future.

Nora Herlihy, a native of Cork, taught in North Dublin and was greatly affected by the high levels of poverty among her pupils and her families. The movie depiction of Frank Mc Court’s Limerick has been accused of tarnishing history for emotional effect but there are many among the older generation in Ireland who readily identify with some of its imagery. It was more Celtic twilight than Celtic tiger.

Nora became aware of credit union through the strong Irish American connection. Her research convinced her that it would work in Ireland and could prove of lasting benefit to the community among which she worked in North Dublin. She was assisted in her work by Sean P MacEoin and Sean Forde. With the help of CUNA, she founded Ireland’s first credit union in Donore Avenue, Dublin, in 1958.

Clones followed in 1959 and later Derry in 1960. The Irish League of Credit Unions was founded in 1960 as a non-statutory, self-regulatory body to support the development of the Movement. Nora was its first President and I succeeded her in 1964 at the ripe old age of 27. During that period, Dail Eireann passed credit union legislation in 1966; a Registrar for Credit Unions in Northern Ireland was legislated for by an amendment to the Industrial and Provident Societies Act in 1968. I resigned from the Board of the Irish League in 1969 when I was first elected to Parliament.

There was massive financial, social and political exclusion in the Derry that I grew up in. Unemployment, particularly among males, was the highest in Europe. Wages were low because of the market situation. A chronic shortage of housing exacerbated the social problems. Many young families waited up to 10 years and more to obtain local authority housing. Working people depended for credit to purchase household goods and clothing on hire purchase, credit stores, the pawnshop and, in the worst situations, local moneylenders. Economic gurus would not have chosen it as a centre to launch a financial, social enterprise.

However, a small group of us had begun to meet and discuss ways of tackling the social issues. We identified access to affordable financial services as a priority, if we were to restore confidence and self esteem to a depressed community. On learning of credit union and after spending months researching it, we were convinced that we had a vehicle that could affect people’s lives positively in a City, where for many years there had been a long absence of positive initiatives.

Five of us met to launch Derry Credit Union in September 1960 in the house of a member of the group in an area that has come to be known world wide as the Bogside. Our pooled savings, the first shares in the credit union, amounted to something over £9. In the early days, we attracted support from groups of workers, including the dockers; as casual workers, they frequently experienced hardship on a regular basis. They gave us the use of the middle floor of their social centre, the Rossville Hall, as a collection centre. Our committed team of volunteers gave selflessly of their time and expertise to make Derry Credit Union work and it did.

Within the first three years of operation, membership and volume of work grew so rapidly that we had to appoint staff to ensure the quality of service that our members deserved. Forty-five years later, Derry Credit Union now has 25 000 members with total assets of over £70 million pounds. Last year, it granted loans of around £25 million pounds and, since its establishment, over quarter of a billion pounds has been borrowed by members. This all been achieved from regular small saving and it has generated wealth that has been retained in the community and made to work for it. Those are the tangible benefits.

Much more important has been the effect on the confidence and psyche of our people. It has raised their self-esteem and belief to levels where now they recognise that change can be affected because they have control over their affairs. They are prepared to meet challenges and to seek solutions. Two other credit unions, with the support and encouragement of Derry, have since developed in the City and are well established in the communities that they serve. In effect, there are now 47 000 credit union members in Derry, that’s approximately 50% of the population.

Across Ireland, there are over 600 credit unions with 2.9 million members and over 12 billion euros in assets. Nearly 10 000 active volunteers manage the movement and employ approximately 3 800 personnel in its operation. This means that over half the population has access to affordable credit and is committed to regular saving. Ireland has the highest per capita savings in the European Union and I am certain that credit union is the single biggest factor in this.

I mentioned earlier, in the context of Derry, the effect on people’s confidence when they recognise that they can succeed in co-operative action. There is a transfer of this self-belief into other areas in the life of a nation, particularly in education and training. Confidence is a pre-requisite to learning and teaching. Ireland is now recognised world wide as a source of high-level skills and education. It is the World’s single biggest exporter of computer software, greater than Japan or the States. It has consistently reflected the highest percentage growth of all of the European countries over the last ten years.

I am not attributing the explosive growth of the Celtic Tiger solely to the Credit Union Movement but I am convinced that it was an extremely important, contributory factor. What is beyond dispute is that it is a singularly potent vehicle for social inclusion.


Britain
I am sure that there are many individuals in this audience who are much better qualified to comment on the development of credit union in the UK than I am. I will restrict myself merely to making a few observations and drawing comparison with the Irish situation. Although credit unions began to be formed in Britain from the 1960’s, it is clear that they have not managed the same penetration of the population as their counterparts in Ireland.

However, before seeking to make basic arithmetic comparisons, I think we must realise that we are not comparing like with like. The Irish have traditionally been a much more homogenous group than the people of Britain have. During my years as President of the Irish League, when I visited credit unions and study groups anywhere in Ireland, there were striking similarities in the groups that I met and in the aspirations that they held for their communities. I suspect that is not the case here in Scotland, England and Wales. Indeed, you are three distinctive nations with separate cultural identities.

Ethnicity was a factor in the first credit unions in London which were established by Caribbean people who had migrated here for economic reasons. The Americans had already established credit unions on Jamaica and other islands. CUNA’s Paddy Bailey, was particularly supportive. Frank Villiers of Hornsey spent some time work shadowing the operation in our office in Derry and visiting some of the local credit unions in Chapter 1.

British community credit unions tended to be established in areas of low income which made it a slow process to build up assets through shares. The three credit unions in Derry, for example, while serving deprived areas, their common bonds also reflect a wide social mix and members were drawn from across that spectrum. This breadth was important in attracting volunteers with leadership qualities and important skills.

Many UK local authorities gave positive support to the development of credit unions and provided resources in the form of premises, staffing and training. There is no history of such support in the Irish movement with the consequence that our credit unions have had to be self-supporting from a very early stage. That meant pushing for growth through members, shares and loans. I suspect that small British credit unions were not always driven by the same imperatives. It was an identical lesson to the one learned 150 years ago by Raiffeisen - you have to succeed from your own resources.

The 1979 Credit Union Act, which was passed at the fag end of the Callaghan Government, was not unduly generous to the concept of a flourishing British credit union movement. The cap on shares at £2000 and membership at 5000 were unduly repressive and indicative of a lack of clear understanding and vision by Government. I know that these figures have been amended over the years and that they are currently under review by the Financial Services Authority.

The Credit Union Movement across the World has been zealous in asserting its autonomy, while clearly operating within a legislative and regulatory framework. I sometimes feel that over reliance on grant aid in this country has lead to an unhealthy proximity to the whims of Government at both local and national level.

For example, the Treasury has currently consulted on the 1% cap on interest rates, which was imposed by statute in the ‘79 Act. In the consultation paper, it implicitly encourages credit unions to increase their interest charges to a possible 2% per month to ‘high risk’ borrowers. This indicates little understanding of the philosophy of a not-for-profit movement, which cherishes the fundamental, co-operative principle of equality and has been a constant feature of its development for over a hundred years.

I know that if implemented that it will be permissive legislation, which will allow individual credit unions to make their own decisions. However my point is that this errant thinking should never arise in the first place. It is the duty of Government to establish appropriate legislation to protect the savings of members but the determination of policy is a matter for the credit union movement to decide.

On a more positive note there are some 560 credit unions in Britain, 134 of them here in Scotland, with total assets of around £400 million held by about half a million members. There is also evidence of increased growth in shares, loans and members over the last five years. The important effect of this is that many people and their families haveaccess to affordable financial services – that they are no longer socially and financially excluded. For that I commend the work of all those involved in progressing the development of the British Credit Union movement over the last forty years.

As your President said earlier, Bert Mullen, whose memory we celebrate this evening, looked to Ireland for assistance when he was working to establish the first credit union in Scotland. There has always been a close connection between our two nations – my family name is a clear, personal indicator of that. It was fortunate too that the late General Secretary of the Irish League, Michael O’Doherty, who had a special fondness for the Scottish people, was able to connect Bert with my good friend, John Patton, who had deserted us in Derry to marry a Scot and to live in Edinburgh. Our loss was your gain; however, he seems to have thrived on it and I am particularly pleased that there is a Derry influence in these parts.


Conclusion
I have chosen this evening to concentrate on only a small area of the international credit union movement. However, today we celebrate the achievements of the greatest self help movement in the World with 136 million other credit union members in over 100 countries – in Africa, Asia, the Carribean, Europe, Latin America, the Middle East (there are two credit unions in Afghanistan and 1600 in Iran), North America, and the South Pacific, particularly Australia, where there are 4 million members. Each has recognised the potential for this superb model of social inclusion.

What do we mean by social inclusion? It’s not just about providing access to affordable credit or a route for small savings. It is about: • building confidence in individuals and families, • promoting thrift, • engaging with each other, • maintaining a democratic system on egalitarian principles, • putting people before profit, • showing respect for the individual, • encouraging personal and community development, • sustaining the voluntary spirit, • retaining wealth for the mutual good of all members and the areas in which they live, • Taking a holistic view of the individual as a fellow human being

Credit Union has manifested all of these qualities and will continue to do so here in Scotland and throughout the World. That’s why I believe that it is an international model of social inclusion.

Thank you.

John Hume, University of Glasgow, 20 October, 2005