While CUFA emerged from the customer-owned banking movement in Australia and once stood for “Credit Union Foundation Australia”, we are now an independent development agency, fully accredited by the Department of Foreign Affairs and Trade through the Australian Aid program, and a signatory to the Australian Council for International Development’s Code of Conduct.
Our story began in 1971 when a small group of dedicated Australian bankers in the credit union sector came together to make a difference to their neighbours in Asia, the Pacific Islands and Australia. Witnessing the lack of effectiveness of charity handouts, they decided that to create real and lasting change in poor communities, a different approach would be needed.
The group were long-time veterans in the banking world and so had lived and breathed the potential for financial institutions to shape society – yet the model they used was one that has seen a shift towards inequality dating back to the 19th century.
The Financial Cooperative
In 19th century Germany, many poor farmers were finding themselves in a money-lenders web. Following periods of drought and low crop yield they were forced to take out loan after loan to get them through. With interest piling, many ended up spiralling into debt, hardship and despair.
Amongst them was a man named Franz Hermann Schulze-Delitzsch. Franz was a clever economist and seeing the poverty experienced by his fellow countrymen, he decided to develop a solution to it once and for all. He created a cooperative group that the farmers could all join – with each member contributing a small amount to the group on a regular basis.
At times of need, the members could borrow from the pooled savings to get them through the droughts and low income periods. In this way, they were able to avoid the burdensome debt that they otherwise would have accumulated.
The first financial cooperative was born.
The model exploded across Europe and North America during the 19th Century soon reaching every corner of the planet. To this day, the development of financial cooperatives has remained one of the most effective and respected models of sustainable development around the world, giving poor people the chance to lift themselves out of poverty and create a better future.
CUFA’s early work was to develop and support financial cooperatives, village savings banks and credit unions across the Asia-Pacific region. We have worked in 14 countries across the Pacific, in the Solomon Islands and Papua New Guinea, in Cambodia, Myanmar, Sri Lanka, Timor-Leste and many more countries.
Today, CUFA’s work covers all areas of economic development: micro-enterprise support, social enterprises, employment placement programs, financial literacy education for both children and adults, and livelihoods programs. We work to help local people build their communities and participate in their local economics.
Learn more about our work.