History of Credit Unions

Credit Unions emerged in Germany during the 19th century following the work of two pioneers: Friedrich Wilhelm Raiffeisenm, son of a Lutheran Pastor, and Herman Schultze-Delitzch, who were appalled at the ravaged wrought on the poor by professional moneylenders.


Raiffeisen formed his first Credit Society in 1862 with the idea of serving poor local farmers. By 1883 there were 425 such socieities in Germany. Schultze-Delitzch formed the idea of creating small banksserving craftsmen and artisans.The Credit Union movement, as we know it today, is the result of over 150 years of development. Yet it follows the co-operative prinicples laid down by these two pioneers.


  • Democracy- Control is distributed among the members equally without any relation to the amount of their savings. Each member has one vote at all general meetings of the Credit Union.
  • Voluntary Action- Membership is voluntary with nobody being compelled to join. Shares are owned by the member and may be withdrawn at any time. The Credit Union attracts and keeps its members by providing good quality services designed to meet their needs
  • Autonomy- The Credit Union depends solely on the help provided for and by its members. It should not become dependant on outside support.
  • Self-Determination- A Credit Union will work to help its memebers attain sel-sufficiency and self-determination. Similarly, although a Credit Union itself may require development support the plan must always for it to become self-sustaining
  • Equality - Memebers must have equal rights to participate in the organisation although they may use different services and gain different benefits from its memebership. No member shall have the right to special privileges.
  • Mutuality- A Credit Union does not work for the benefit of a small special group but tfor the good of the whole community. Credit Unions Unite People in a Common Effort to Provide Basic Economic Security