Government of Trinidad and Tobagogov.tt

Credit Unions vs. Other Financial Institutions

 

 Credit UnionsCommercial BanksOther Microfinance Institutions (MFIs)
Structure Not-for-profit, member-owned financial cooperatives funded largely by voluntary member deposits For-profit institutions owned by stockholders Institutions typically funded by external loans, grants and/or investors
Clientele Members share a common bond, such as where they live, work or worship. Service to the poor is blended with service to a broader spectrum of the population, which allows credit unions to offer competitive rates and fees. Typically serve middle-to-high income clients. No restrictions on clientele. Target low-income members/clients, mostly women, who belong to the same community.
Governance Credit union members elect a volunteer board of directors from their membership. Members each have one vote in board elections, regardless of their amount of savings or shares in the credit union. Stockholders vote for a paid board of directors who may not be from the community or use the bank's services. Votes are weighted based on the amount of stock owned. Institutions are run by an appointed board of directors or salaried staff.
Earnings Net income builds reserves and is divided among members. Stockholders receive a pro-rata share of profits. Net income builds reserves or is divided among investors.
Products & Services Full range of financial services, primarily savings, credit, remittances and insurance. Full range of financial services, including investment opportunities. Focus on microcredit. Some MFIs offer savings products and remittance services.
Service Delivery Main office, shared branching, ATMs, Internet Main office, shared branching, ATMs, POS devices, PDAs, cell phones, Internet Regular visits to the community group