Credit Unions and the Supply of Insurance to Low Income Households

The low-income credit union modelled in this paper is an institution with a particular form of contract designed to allow it to operate among agents that are excluded from using banks. Specifically credit unions deal with those potentially on the minimum income guarantee. The challenge facing them is to distinguish between those whose motivation is consumption smoothing and those who seek the largest credible loan with the intention of defaulting. This is achieved by setting the level of the minimum deposit and the loan and deposit rates such that an intentional defaulter has no incentive to join the credit union.credit unions, intentional defaulter, financial contract

Single-Phase Operation of Three-Phase Motors

Against the current backdrop of deteriorating economic and financial conditions, the authors consider recent trends and current prospects for credit unions in Great Britain. Although credit unions have experienced solid membership and asset growth, there are clouds on the horizon. Bad debts and loan arrears are on the rise and may be linked to recent legislative amendments and the increasing use by government of credit unions as a mechanism to achieve its financial inclusion goals. Whatever the reason, the deterioration in the loan book needs to be quickly addressed, or it will ultimately result in either more government bailouts or a stream of failing credit unions

The Impact of debt and financial stress on health in Northern Irish households

We analyse data collected from a survey of Northern Irish low-income households experiencing varying degrees of financial hardship and examine how debt affects health and health-related behaviours. Our results indicate that the subjective experience of feeling financially stressed has a robust relationship with most aspects of health, including ability to self-care, problems performing usual activities, pain problems and psychological health. In contrast, the size of the debt, the type of debt or the number of different lenders does not add any extra explanatory power. Additionally, our results indicate that the pathway from financial difficulties to worse health runs through worse diets and increased consumption of cigarettes and drugs. This research is timely as household debt burdens will soon surpass the high levels seen at the time of the financial crisis and the introduction of welfare reform in Northern Ireland will put additional strain on low-income households. </jats:p

Modelling the Performance of Irish Credit Unions, 2002 to 2010

This study undertakes a modeling based performance assessment of all Irish credit unions between 2002 and 2010, a particularly turbulent period in their history. The analysis explicitly addresses the current challenges faced by credit unions in that the modeling approach used rewards credit unions for reducing undesirable outputs (impaired loans and investments) as well as for increasing desirable outputs (loans, earning assets and members’ funds) and decreasing inputs (labour expenditure, capital expenditure and fund expenses). The main findings are: credit unions are subject to increasing returns to scale; technical regression occurred in the years after 2007; there is significant scope for an improvement in efficiency through expansion of desirable outputs and contraction of undesirable outputs and inputs; and that larger credit unions, that are better capitalised and pay a higher dividend to members are more efficient than their smaller, less capitalised, and lower dividend paying counterparts

Who consumes the credit union subsidies?

Credit unions in the United States (US) are exempt (benefit from subsidies) from federal corporate income taxes, which are traditionally justified by their non-profit cooperative status and mission of meeting the financial needs of individuals of modest means. In recent years, the efficacy and fairness of these subsidies has been debated extensively as the traditional demarcation between banks and credit unions and their respective customer bases have blurred. To investigate how credit unions allocate subsidies to various stakeholders, we estimate a structural profit model for matched pairs of credit unions and commercial banks. We find that credit unions use most (approximately 90%) of their tax exemption for the benefit of their membership via above-market deposit interest rates.Publisher PDFPeer reviewe