Process innovation in credit unions: evidence from Ireland, Scotland, Northern Ireland, and Ghana

Credit unions are community financial institutions existed mainly to provide financial services to their members. Credit unions have an impact on local economies that is estimated to be US$192 billion, of which US$117 billion is value added. Members of credit unions save about US$10.2 billion each year from lower fees and better interest rates relative to what they would be charged by other financial service providers. The first innovation in the credit union sector happened in 1900 when the sector in Canada became the first financial institutions to provide ownership and membership to all customers, as well as providing the first personal loan based on a borrower’s character. These have been regarded process innovations, and process innovation have been found to lower operational costs, simplify processes, bring about faster cycle times and better utilise assets in organisations. However, few studies have directly examined innovation in these organisations, and little is understood about the types of processes that credit unions have undertaken to provide turn around and relevant services to their members and potential members. To address the gap, we survey innovation in credit unions across four countries. We found that deregulation of the sector is key for the sector innovation in terms of growth and development from a nascent industry to mature industry, where sophisticated financial products are provided to consumers and communities. Additionally, process innovation provided stimulus for operational and structural innovations that has in turn enhanced products and services delivery in these organisations.