Why Credit Unions are Important to Young People

Credit unions have become an inalienable part of the financial system which completes the banking system. They undertook the function of maintenance of household finances and in that way complemented the banking system. According to its socio-economic nature the credit union is a consumer cooperative the members of which unite their savings in a general fund, from which they provide themselves a cheap and accessible credit. For entering into a cooperative it is necessary to pay in a share which gives the right to get a credit and other financial services from a credit union, and also to participate in a management, carried out on the basis of co-operative principle “one man one voice”. Credit union activity is not directed on a profit earning. The profits of credit union are distributed between shareholders or to reduction of credit union services prices. In official statistics credit unions fall into the category of unprofitable organizations. In my work I try to clear up why credit unions are so important to young people.
Credit union is the consumer cooperative and it makes credits for the consumer aims and not for the industrial or financial investment. Credit unions, the base of which is household finances, are disinclined to use these finances for the risky investments. Credit or lending (which is given only to the credit unions’ members) is belonged to the category of “secure” investments. Its repayment is guaranteed not only by the traditional security (bail, pawning etc) but the private borrower reputation. Belonging to the same social community is the main factor of the fulfillment of the borrower engagements to the credit union. As the institute of “security finances” the credit union orientates mainly on the stability but not the profit. That’s why stability guaranteeing measures play the main part and fist of all assurance of loan repayment and shareholders’ savings safety.
Conclusion: for the young people who want to get marry or create their business there are two very important things: money and stability. Credit unions are able to give both requirements. Credit unions have lower loan rates, higher saving rates and fewer service fees. Besides the personal confidence is also plays an important part for the young people. They have dealings with the same people as themselves, they are ready for the cooperation with the people of their society but not with expensive and sometimes unstable bank, trust to which is based upon the advertisement.
The other thing that can be attractive for the young people and their parents is the financial education. A lot of lectures, lessons at schools and colleges (and even in the kindergartens, entertainment activities can teach the young generation how to use money competently. These arrangements are able to prevent the young people of the thoughtless investment and money spending in the future.
One more very interesting thing is mobility of money investment. May be it is not very usual for parents, but for the young people it is quite handy to sent money with the help of the Internet (e.g. “web-money”) or cash cards (such as Cirrus/Maestro, Visa Electron, Visa, EuroCard/MasterCard). It is rather comfortably for those who travel or live far-away. Modern credit unions can guarantee such kind of activity.
Credit unions provide the opportunity to get the higher education (e.g. “Saving for College Programe”).
Credit Unions are quite profitable and suitable for the young generation. I’ve mentioned several reasons:
1. Credit unions have non-for-profit cooperatives.
2. Owned by members.
3. Operated by mostly volunteer boards but not the by the paid boards.
4. People trust not the advertisement but the people from the same society community.

References
America’s Credit Unions (2008, March). Where people are worth more than money?
Retrieved March, 1, 2008 from http://www.creditunion.coop/
CUNA (2008, January). Research & Statistics. Retrieved from February, 12, 2008
http://advice.cuna.org
National Credit Union Association (2007, December). Credit Unions. Retrieved from
January, 24, 2008 www.ncua.gov