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Slovak Republic to re-establish CUs
BRATISLAVA, Slovak Republic (10/12/09)--The Slovak Republic, with the help of the World Council of Credit Unions (WOCCU), is working to re-establish credit unions in that country. In 1845, cooperative pioneer Samuel Jurkoviè founded one of Eastern Europe's first credit unions in the village of Sobotište in what is now the Slovak Republic. Today, there are no credit unions left in
Click to view larger image Sobotište Mayor Dana Ceranova (left) displays the village guest book with the help of World Council of Credit Unions (WOCCU) Brian Branch (Center) and the National Association of Cooperative Savings & Credit Unions Pawel Grzesik. The Slovak Republic, with the help of WOCCU, is working to re-establish credit unions in the country.
the village, according to Dana Ceranova, Sobotište's mayor. As a result, the village’s inhabitants are paying higher prices for financial services, a situation the global credit union movement would like to change, WOCCU said. Ceranova and a small group of grassroots organizers want credit unions to return to the Slovak Republic, and have enlisted aid from WOCCU and the National Association of Cooperative Savings & Credit Unions (NACSCU)--WOCCU’s member organization in Poland. They will work with the republic’s national government to establish regulatory standards to help credit unions flourish again. “There is no legislative framework for credit unions here,” said Leonard Hölbling, board member of the Slovak Association of Savings Cooperatives (SASC), which is helping spearhead the initiative. “We want to establish the proper legislative framework informed by international best practices.” Credit unions have spread throughout Eastern Europe during the past two decades because of the efforts of WOCCU and NACSCU--which provided extensive credit union development assistance in Belarus, Macedonia, Moldova, Russia and Ukraine. Due to a high level of interest on the part of its people, the Slovak Republic may be the next country to experience the growth of financial cooperatives, explained Brian Branch, WOCCU's executive vice president and chief operating officer. “Two things must exist for credit unions to thrive--interest and support of the people being served, and the proper legislative and regulatory infrastructure,” said Branch, who recently visited the
Click to view larger image World Council of Credit Unions’ Brian Branch (left) greets Slovak Republic Parliament Vice President Miroslav Cíž. (Photos provided by World Council of Credit Unions)
country with Pawe³ Grzesik, plenipotentiary head of NACSCU's Warsaw office. “Slovakians have expressed an interest, and our hope is that we can help them affect the proper legislative and regulatory solutions,” Branch added. In support of SASC, Branch and Grzesik met with officials from the republic’s Central Bank, Ministry of Finance, Ministry of Foreign Relations and Parliament in Bratislava to discuss policy framework for credit unions in a country dominated by urban retail banking. The delegation stressed the benefits of credit unions as lower-cost consumer alternatives outside of urban areas, particularly in villages like Sobotište. As cost-effective alternative providers, credit unions exert competitive pressure on rates and fees while maximizing value to consumers rather than profits for shareholders, Branch told government officials, including Miroslav Èíž, vice president of the republic’s parliament. Slovak Republic policymakers expressed concerns based on experiences with financial speculators and manipulators who used cooperative models to disguise pyramid schemes that negatively affected the country’s economy. Local credit union organizers and delegation members explained how cooperative governance principles and prudential regulations properly exercised can better control risk and ensure the true cooperative management of registered credit unions. “Mr. Èíž responded that the Slovak Republic needs credit unions’ social outreach to serve marginalized populations currently being ignored by banks,” Branch said. “He agreed to support credit union development to accomplish this goal.” Four savings cooperatives exist in the republic. All are registered under a civil code that allows them to accept member deposits to invest in the stock market but does not allow them to make member loans. The Slovak Republic is the latest focus in WOCCU’s ongoing collaboration with NACSCU to develop credit unions. Efforts to help the republic’s growing credit union movement will draw heavily on NACSCU’s past successes within the region, Branch said.
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