dr. lou hammond ketilson november 2012
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Dr. Lou Hammond Ketilson November 2012. Building Resilient Communities: The Economic Impact of Credit Unions and Caisses Populaires in Canada. The Issue What does this have to do with co-operatives? Why you should care What we do know What we are asking. - PowerPoint PPT PresentationTRANSCRIPT
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Dr. Lou Hammond KetilsonNovember 2012
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Measuring the Cooperative Difference Research Network
• The Issue• What does this have to do with co-operatives?• Why you should care• What we do know • What we are asking
Building Resilient Communities: The Economic Impact of Credit Unions and Caisses
Populaires in Canada
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Measuring the Cooperative Difference Research Network
“the economic meltdown had revealed a “flaw in the model” that he had not expected – that banks operating in self-interest would not self-regulate to protect their shareholders and institutions” (Allan Greenspan, 2008)
What does this have to do with co-operatives?
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Measuring the Cooperative Difference Research Network
“public bail-out of private, investor-owned banks underlined the virtues of a customer-owned co-operative banking system that is more risk-averse and less driven by the need to make profits for investors and bonuses for managers”
(Resilience of Co-operative Business Model 2009)
What does this have to do with co-operatives?
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Measuring the Cooperative Difference Research Network
• World Council of Credit Unions has 49,000 credit unions in membership, with 177 million individual members in 96 countries.
• International Raiffeisen Union estimates that 900,000 co-operatives with around 500 million members in over 100 countries
• In Europe 4200 local co-operative banks,60,000 branches, market share of 20% serve 45 million members and 159 million customers.
• Rabobank - 50% in membership, largest agricultural bank in world, rated world’s third safest bank
World-wide Co-operative Banking Sector is extraordinarily large
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Measuring the Cooperative Difference Research Network
Why should you care?
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Measuring the Cooperative Difference Research Network
• Co-operatives are an underestimated and overlooked opportunity
• Co-operatives have a higher survival rate than other businesses
• Financial Co-operatives are – Trusted– Locally controlled– Capable of addressing tremendous need
Why should you care?
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Measuring the Cooperative Difference Research Network
• Globally, – 800 million members, over 100 countries– Proven record of success– Top 300 co-operatives record aggregate turnover 1.6
Trillion US
• In Canada – ranking in top 300: – Desjardins (#36), Federated Co-operatives Limited
(#52), La Coop fédérée (#104), The Co-operators (#120), Agropur (#144), United Farmers of Alberta (#177), La Capitale (#259), and Calgary Co-operative Association (#268).
Why should you care?
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Measuring the Cooperative Difference Research Network
• 9000 co-operatives and credit unions• 18 million members – 1/3 Canadians• Exist in virtually every sector • $330 billion in assets• 150,000 employees; 100,000 volunteer
directors/committee members• 2nd largest lender to small business
Canada’s Co-operatives
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Measuring the Cooperative Difference Research Network
Two groups of financial co-operatives in Canada
• Credit unions
• 378 credit unions at 1,745 locations• 5 Centrals and one Federation own and belong to
Credit Union Central of Canada
• Desjardins caisses populaires• 476 caisses own and belong to the Fédération des
Caisses Desjardins
Canada’s Financial Co-operatives
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Canada’sCo-operative BankingSystem
CANADA10,780,513 Members(33% of pop.)$242 billion
BC1,696,498members(38% of pop.)$47.2 billion
AB638,564members(17% of pop.)$17.5 billion
SK499,959members(48% of pop.)$13.6 billion
MB598,388members(49% of pop.)$16.9 billion
ON1,630,847members(13% of pop.)$29.8 billion
NB276,935members(37% of pop.)$3.6 billion
NS164,666members(18% of pop.)$1.8 billion
PE62,965members(45% of pop.)$719 million
QC5,163,146members(66% of pop.)$110 billion
NL48,545members(10% of pop.)$776 million
Results include non-Central affiliated credit unions & caisses populaires Q1 2010
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Measuring the Cooperative Difference Research Network
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Measuring the Cooperative Difference Research Network
• Royal Bank of Canada $ 347.4• TD Financial $ 308.1• Scotiabank $ 288.9• CIBC $ 258.5• Bank of Montreal $ 234.6• Credit Unions $ 130.9• National Bank of Canada $ 128.4• Caisses Populaires $ 125.3• Laurentian Bank $ 23.0• Canadian Western Bank $ 11.5
Note: Credit Union data includes non-affiliates. Figures for the banks represent
domestic assets only. Source: CBA, OSFI
Comparison to Banks Total Domestic Assets Q4:2010 (in $ Billions)
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Measuring the Cooperative Difference Research Network
Co-operatives are owned by their member patrons and exist to serve their members
They distribute profits or surpluses according to patronage (use) and not according to investment.
What Does a Co-operative Do?
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Investor owned business
$ $$$
$
Corporate social responsibility
Community
Environment
Investor Owned Firm
S Novkovic 2011
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$
$
Community
Environment
+$
Co-operative
S Novkovic 2011
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Measuring the Cooperative Difference Research Network
Community Donations
What we do know: Commitment to Community
2010 Credit Unions Bank Average (5 Big Banks)
Donations ($) $37.6 million $51.5 million
% of Profits 4.04% 1.11%
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Measuring the Cooperative Difference Research Network
• In 380 outlying communities only bricks-and-mortar financial institution in town
• Maintained service delivery points
• Service provision to SMEs
• Returned 17.9% of income before dividends and taxes to members
What we do know: Commitment to Community
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Measuring the Cooperative Difference Research Network
Factors influencing selection of primary financial institution
Actively involved in community
• 35% CU members• 16% Bank customers
Reputation for good customer service
• 36% CU members• 25%% Bank customers
Friendly staff• 57% CU members• 42% Bank customers
Treat me as an individual • 48% CU members• 34% Bank customers
Care about me• 31% CU members• 21% Bank customers
Trust them more• 33% CU members• 23% Bank customers
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Measuring the Cooperative Difference Research Network
Research focus on • what financial co-operatives do and how they
conduct themselves, and • the impact they have on their stakeholders and
the communities in which they locate and function.
Research Objectives
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Measuring the Cooperative Difference Research Network
• What kinds of assets do credit unions develop for their members and communities?
• How can credit union asset building and wealth accumulation be understood, identified and measured?
• What mechanisms and structures do credit unions use and/or are unique to credit unions to facilitate asset building and wealth accumulation for its members?
Asset Building
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Measuring the Cooperative Difference Research Network
• Instrument development - measure members’ perception of value of financial co-operative’s actions
• Assess – Level of awareness regarding co-op’s actions– Perception of importance to member– Outcome for member
Research Outcome
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Measuring the Cooperative Difference Research Network
Impact and Indicators
Community Economic Development
• Encouraging start or growth of business
• Sustaining businesses• Financial services to
community• Community development
programs• Economic linkages
Skills and Leadership Development
• Formal training• Participation on Board• Participation at annual
meetings• Personal development
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Measuring the Cooperative Difference Research Network
Policy Goals• Financial Inclusion• Employment Creation
In Conclusion
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Measuring the Cooperative Difference Research Network
Thank you
www.usaskstudies.coop