Are credit unions positioning themselves?

It has been observed that notwithstanding the fact that, the credit union movement in Ghana has been in operation for almost 65 years, the brand is not well positioned.

This article will, therefore, consider how credit unions can position themselves well for the 2018/2019 financial year and beyond.

Credit unions are member-owned financial cooperative institutions which provide financial services for their members.

Currently, credit unions are subject to licensing and supervision under the Non-Bank Financial Institution Act, 2008(Act 774).

The Credit Union Movement in Ghana is made up of large, medium and small players. The large credit unions are those with asset base of more than GH¢10 million.

Among the large credit unions are: Abosomakotere, St. Peter’s, Sunyani Area Teachers, SHACCU, Nkoransa Teachers, Dorma Teachers, St. Martin De Porres, St. Gabriel, Legon, Hydro, Dunkwa Teachers, ARCCU Credit Unions etc.

There are three types of credit unions in Ghana and they are: work-place, community and parish-based.

Currently, most of the work-place and parish-based credit unions have opened their common bond to the public with a view to increasing their membership base.

Individual credit unions are affiliated to CUA (Ghana Cooperative Credit Association). CUA is the umbrella body of all credit unions in Ghana.

It is worth mentioning that the first credit union in Africa was formed at Jirapa, in the Upper West Region in September 1955.

1. Managing public perception

Scores of Ghanaians perceive the credit union brand as solely meant for the older folks as well as the lower-class segment.

There is, therefore, the need for the credit union movement to use effective marketing communication strategy to position the brand so well for the general public to appreciate what it stands for and its uniqueness.

This will go a long way to put the brand in the evoke set of potential customers who desire to access financial services.

It is worth mentioning that some credit unions have positioned themselves so well and as a result of that, they have been able to attract reputable corporate entities, middle and upper-class segments.

A notable example is Abosomakotere Cooperative Credit Union with its head office located at Techiman in the Brong Ahafo Region.

I would like to take this opportunity to congratulate the board and the management team led by Mr Prosper Aforbi.

St. Martin De Porres Cooperative Credit Union in Kumasi has also positioned itself so well and this has engendered member’s trust and confidence.

I would like to say well done to the board and the management team led by Mr Fredua Agyemang Augustine for their hard work and commitment.

The Ghana Cooperative Credit Union Association (CUA) has as part of its’ mission to market the credit union concept to making it a household word.

In line with that, management of CUA should do more in effective integrated marketing communication with a view to creating strong brand awareness and differentiate the brand.

2. Make the brand visible

In addition to managing public perception, credit unions should endeavour to make the brand highly visible to prospective members and the public at large.

This could be done through above and below the lines advertisements such as advertising through the radio, T.V, billboards at vantage points, among others.

Branch locations should also be highly visible to the public. The General Manager of Emmanuel Cooperative Credit Union in Kumasi, Mr Nicholas Asante, is doing well when it comes to enhancing brand visibility.

This has been done through branded aprons offered to existing and perspective members.

3. Embrace the digital transformation

Technology is changing the banking landscape.

Credit unions provide basic banking services to members hence, the need to position themselves well by embracing the digital transformation to remain relevant.

Credit unions should adapt or die. Digital channels such as mobile banking, internet banking, ATM platforms ensure easy and speedy delivery of financial services to customers.

Credit unions should not have the mind-set that their members are not technology savvy and ,therefore, will continue to cling to the traditional ways of rendering services to members.

Credit union members are increasingly becoming sophisticated, demanding, choosy and technologically inclined. Therefore, there is the need for credit unions to adapt to meet the evolving behaviour and needs of their members.

It is heart-warming to say that some credit unions have already deployed ATM platforms and other technologically driven products. Examples are: SHACCU, ARCUU and Abosomakotere Credit Unions among others.

The Cooperative Credit Union Associations of Ghana (CUA) will soon deploy CUANET mobile banking service for some credit unions on a pilot basis.

4. Pursue aggressive membership growth drive

Membership matters so much in the cooperative credit union sector.

Why?

Membership has impact on key performance indicators such as total assets, liquid investments, the quantum of member savings, member share and so forth.

Credit unions should use pull and push promotional strategies to drive growth in membership.

Staff of credit unions should frequently move out to prospect for new members.

Credit unions should avoid over-reliance on the education committee members for the acquisition of new members.

As mentioned above, the first credit union in Africa was formed in Ghana.

However, the credit union penetration rate is still low in Ghana hence the need for aggressive membership growth drive.

Recent data released by the World Bank revealed that 48 per cent of Ghanaian adults are not banked as of 2017.

This implies that there is potential for CUs to grow their membership.

5. Improve the quality of the board

Like other financial institutions, the board of a credit union steers the affairs of the institution.

To position credit unions well, members of the board should be experienced, knowledgeable, competent and should be of good repute.

Officials of CUA and Department of Cooperatives who are involved in vetting aspiring directors should improve on the vetting process in order to ensure that qualified people are selected to be on the board.

Newly elected directors of credit unions should be provided with orientation and training promptly to enable them to be abreast of their roles and responsibilities and other corporate governance issues.

Directors should constantly be provided with training in order to update and upgrade their skills and knowledge for effective discharge of their responsibilities.

It is worth mentioning that effective and efficient directors are important because there is a saying that “behind every successful business exists an astute leadership”.

Conclusion

So far, the article has discussed the various ways in which credit unions can position themselves to remain competitive and attractive to potential members.

Credit unions have certain distinguish features and they should be used as position strategy.

The government and the Bank of Ghana should give Cooperative Credit Unions the necessary attention because the sector is contributing to promoting financial inclusion and poverty reduction. — GB

The author is the head of Proven Trusted Solutions, an employee training and development and marketing research firm.

The CUANET will make it possible for credit union members to access financial services at anywhere at any time.