Origins
The first successful credit unions began in Germany under the leadership of cooperative pioneer Hermann Schulze-Delitzsch. These credit unions would be recognizable today, since they adhered to the basic aspects of the co-operative identity: that is, they were “based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others.” Shulze is credited with developing the bond of association which still forms the legal basis for credit unions today.
Unlike many of his contemporaries, Schulze-Delitzsch recognized that the functions of retail lending and purchasing business inputs were best kept separate in the interests of sound cooperative management. In 1852 Schulze-Delitzsch consolidated the learning from two pilot projects, one in Eilenburg and the other in Delitzsch into what are generally recognized as the first credit unions in the world.
Schulze-Delitzsch was an excellent organizer and advocate for the credit union idea. “Wherever he went, new people’s banks sprang up … by 1859 there were 183 with 18,000 members in Posen and Saxony.”
Schulze focused much of his attention on developing federations or trade associations to help protect the brand of these small organizations, ensure their stability and link them to the global banking system. As a member of the Prussian House of Representatives and the German Reichstag he secured passage of a national credit union law in 1871. By 1912 the people’s banks he founded had 641,000 members.
Read more about this topic: History Of Credit Unions
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