Challenging times for credit unions

Nelson Building Society general manager Ken Beams

Credit unions and their close relative, building societies, have been around for more than 100 years and offer a viable lending alternative to the banks.

But KPMG’s recent Financial Institutions Performance Survey noted that the tightening of the credit market has caused a flow-on effect to some participants of the non-bank sector in recent months.

This means that non-bank deposit takers are finding it more challenging to secure the necessary funds they require in the face of strong competition from banks within the local deposit market, the report said.

“This puts credit unions and building societies in a particularly challenging position as their legal structure limits where they are legally able to source funds.