2025 is designated the International Year of Cooperatives by the UN.
As a financial cooperative, Credit Unions (CUs) are member-owned and governed by elected volunteers.
A society is considered financially included when financial products and services that meet their individual and business needs are accessible to all regardless of their economic status. However, a large portion of the Sierra Leone population of 8.6 million people, particularly those in hard-to-reach areas, are financially excluded.
Furthermore, the 2021 Global Findex Data statistics revealed that only 29 percent of the adult population has an account with a formal financial institution or a mobile money provider in Sierra Leone.
The lack of access to financial services is a contributing factor to the high level of poverty in the country, which is 59.2 percent based on the UNDP 2023 Multidimensional Poverty Index. According to the World Bank Group, financial inclusion has been identified as an enabler for 7 of the 17 Sustainable Development Goals (SDGs). It considers financial inclusion “a key enabler to reduce extreme poverty and boost shared prosperity”. However, access to savings or loan facilities remains a critical factor impeding economic growth in Sierra Leone. There are about 1.5 million women in Sierra Leone who are operating micro and small business enterprises, and this sector accounts for 90 percent of the country’s economy (Cherie Blair Foundation for Women, 2022). However, limited access to affordable financial services impedes the growth potential of women in many communities. For instance, the traditional financial sector like banks normally overlook loans facilities especially to people who are operating small and medium enterprises. Thus, starting a small business to earn income to improve socio economic status has always been a daunting task. However, there is a financial institution that can address this, credit unions.
Credit unions (CUs) are not-for-profit financial cooperative. They are member owned and community driven and by their nature are uniquely placed to deliver accessible financial services to address the financial needs of its members. The CU financial model is cantered on the philosophy of “people helping people”. CUs are part of the formal financial sector and it is a global movement, with CUs in 184 countries around the world. The CU principles and ethos ensure that they play a vital role in empowering financially excluded people.
The CU movement in Sierra Leone has existed for13 years. However, knowledge of the CU movement is still low – it can either be a puzzle or misunderstood especially to non-members. For instance, every time a Credit Union is being mentioned the immediate response you get from non-members is “kam tros me ba’’ (give me credit). Nevertheless, members of a credit union generally hold a positive perspective about being a member.
In CUs, members pool their resources together to save and lend to each other at a reasonable interest rate. Currently, in Sierra Leone there are 25 CUs operating across the country which are affiliated to the apex body, National Cooperative Credit Union Association (NaCCUA).
These 25 CUs have a total membership of 18,600, 57 percent are women and 43 percent are men. CU members have cumulative savings of Le 29.7 million, share capital of le 3.6 million with loans outstanding of 29 million new Leones. CUs are located in rural and urban communities in Sierra Leone, thus providing members in these locations with access to secure savings and affordable credit to address their financial needs. Services provided by CUs are in the form of savings and loans: typically, loans are available for education, investment purposes, agricultural needs. Thus, enabling CU members to save for a better future and become financially included.
Wainde Conteh, Manager, Tawopaneh Traders Cooperative CU in Freetown noted that Tawopaneh CU “formed in 2011, aims to address financial needs of its members especially those who operate small business enterprises.” Tawopaneh CU currently has a total of 2,078 members and provides range of service to its members in the form of different savings and loan products. According to Wainde, “becoming a member of a CU is not a complicated process, its starts with a registration, opening a savings account and then after six months of savings, a member is entitled to a loan amount that is three times their savings.” However, despite the easy process of becoming a member, many people especially women could not meet the criteria, so many CUs in Sierra Leone have developed a program – Graduation Microfinance – to support financial inclusion for potential members who don’t have the financial resources to join. “We support financial inclusion of people in our common bond who don’t meet our CU requirement through the Graduation Microfinance program, these potential members become members of an informal savings and loan group with the purpose of upgrading them to full membership of Tawopaneh.”
As noted above, CUs provide much needed financial assistance to people who want to start and develop their business, especially those operating small and microenterprise; who have difficulties in accessing traditional financial services. By offering small business loans it helps members to be engaged in income generating activities which directly provide job opportunity for members.
Mariama Fofanah, is a small business owner who sells a variety of snacks, drinks and wholesales sachets of water at Brookfields. She was first introduced to the CU three years ago by the people at Bayconfields community. Mariama was told that Bayconfields Cooperative CU is a safe place to save money, and that she can access her savings at any time. Mariama subsequently joined Bayconfields Cooperative CU, and this was the first financial institution that she had ever joined. According to Mariama she was also interested in the affordable rates on loans offered by the CU to develop her business. “When I first joined the CU, I started saving Le 300 every month. Since becoming a member, I have taken out three loans. My recent loan was Le 6,000 and I am paying back regularly over a 10-month period. The purpose of my loans is to continue to develop my business. Before joining the CU, my business capital was Le1,500, now my business capital is worth Le10,000.’’ In addition to growing her business, Mariama is improving her family’s livelihood. For Mariama she appreciates her CU as it is a very secure place to save and get affordable loans.
Salamatu Bangura, Graduation Microfinance member, Nyandeyama Cooperative CU in Kenema explains how she has learnt how to manage her money, “we normally receive financial education training before accessing loans. This training guides us on how to effectively use the money in areas of investing in productive business”.
The CU ethos and values differentiate them from traditional banks, microfinance and other forms of formal financial institutions. They are not only present in remote communities where there are no banks, they provide a number of benefits over banks, making them a better financial option for many people. The cooperative ethos means a CU is “not for profit, not for charity but for service.” Any surplus earned are returned to members in the form of dividends and used to improve services. It is the members who elect the board of directors to govern the CU. The election of the Board takes place at the Annual General Meeting where members also receive reports about the performance of their CU; members have a say because they own the CU, they are not just account holders but shareholders of the CU.
CU can make a great impact on financial inclusion. CUs provide people with access to affordable financial services, they support small businesses and community development, empower individuals through financial education and inculcate the culture of savings among members to inspire financial independence.
As the apex body for CUs, NaCCUA is responsible for supporting and advocating on behalf of the movement. NaCCUA works closely with key stakeholders and is supported by international donors and partners to build a strong CU movement, including the Government of Ireland through Irish Aid, the Irish League of Credit Unions International Development Foundation (ILCUF) the German Sparkassenstiftung Western Africa (DSIK) and SEND SL.
The UN declared 2025 as the International Year of Cooperatives, the theme “Cooperatives Build a Better World” showcases the global impact cooperatives have everywhere. So why not become part of a cooperative and join a CU today?
