International Year of Cooperatives

My Acadian Grandfather

(As told by an SIT employee)

While credit unions may seem to be positioned as “bank alternatives” in today’s age, that wasn’t always the case. Not long ago, credit unions and cooperatives were the only options for some people. As an example, my Acadian grandfather would never have qualified for a loan at a bank (for starters, banks didn’t welcome Acadians back then, and my grandfather really didn’t really have steady income because he was a carpenter who went from job to job). So what did he do? He worked with the Atlantic Co-op to purchase his appliances, and he paid his credit off on a weekly or monthly basis. He had a very good life. He lived until the ripe age of 98.

The Farmers’ Cooperative

(As told by an SIT employee)

My great-uncle Albert Bowman (Ab) was a farmer in Fullerton, Ontario back in the 1940s.

The war had just ended. Ab was fresh out of the Canadian Air Force. Leaving behind his post as a flying instructor, he returned to school determined to finish what he had started—he’d been studying at the Ontario Agricultural College in Guelph before being interrupted by the war. Ab worked hard. He finished his studies. And, somewhere along the way, he met Florence Greenwood.

In 1942, they married. A couple of years passed and Ab and Florence bought a piece of land together. A derelict farmhouse in Fullerton Township. A place they could raise a family. The two were optimistic about the land, but the house had its problems. It was not in itself beautiful or elegant. It was merely a farmhouse. One that needed work. But Ab and Florence must have seen something else in it.

In 1946, after two years of failing to secure a loan with a local bank, Ab and Florence moved into their new home. They had trouble starting their farm together—the banks wouldn’t provide Ab and Florence with the money they desperately needed to repair their home and begin accumulating a small herd of cattle. So, denied by the bank, they were forced elsewhere.

The couple found some mild success by working with local organizations. The Upper Thames River Conservation Authority had an offer for Ab. And, in return for a small amount of money, Ab’s land was used to test emerging farming techniques. Contour plowing to prevent erosion. Crop rotation to improve the soil. He even dug a pond on his land.

That gave Ab and Florence some income but they needed more capital to purchase a tractor, seeds for crops, and livestock. And they weren’t alone. Many other farmers from Fullerton and the nearby area, particularly Mitchell, were having the same challenges.

That’s when Ab and the other local farmers came up with a solution: The Mitchell & District Credit Union.

The cooperative allowed the farmers to pool their resources together. And, as more farmers and more community members joined the cooperative movement, the credit union was quickly able to offer loans to its members and to the local farmers in Fullerton and Mitchell.

Ab was elected the credit union’s first chairman and served on the board for the next 25 years. Mitchell and District credit union has since (2009) merged with Your Neighbourhood Credit Union.

From a Young Age

(As told by an SIT employee)

My membership at a credit union started at a very early age. My parents took the money received during my baptism and opened my first account with our ethnic-based Credit Union. Since that time, any money I received as a child was deposited until I was old enough to go to college or university or just move out on my own.

I remember I would go to language classes on Saturday mornings and the credit union representative would visit the school and take deposits from children attending. Every Saturday I was given two dollars to deposit. My parents wanted to teach me that the amount didn’t matter, and that the point was to save part of my allowance. This went on for years, and when I was older there was a substantial sum waiting for me. I did this with my own children and they too had a substantial sum awaiting them when they went off to college or moved out.

Later in life, when my godmother was in a home, I remember visiting her and during some visits a credit union representative was there to educate the elderly and help them with their financial needs. My godmother and I found this to be very convenient. When she needed the help and I was her power of attorney, we discussed financial matters confidentially in the comfort of her home.

I know that my credit union also offered scholarships to help within the community. Credit unions take their members' needs seriously and offer out of the box thinking when it comes to financial aid or services for their members.

I am glad I was taught to become a member because now I see the charges banks take on accounts and I take comfort in the thought that I don’t have to pay those fees and still get all the services offered by the big banks including Web Banking and telephone banking. They truly make their members feel special.

A Family Cooperative

(As told by an SIT employee)

What follows is actually quite a popular cooperative model among Iranian families.

I come from a large family. I have 3 aunts, 3 uncles (all from my mom’s side). And they all have their sons and daughters. (This type of cooperative model works much better with many members).

What happens is this.

They start a not-for-profit company among themselves. No registration with any authorities, no bureaucracy, no paperwork. No nothing. One person, the one who is generally good at math, takes the role of the CFO. The family members all become investors in the company, and they start to contribute a certain amount per month so that they can start off with a base fund. When the fund is large enough, they start giving loans to the family members. Who receives the first loans depends on certain factors—the size of the loan, the size of the fund, the number of people receiving a loan. Sometimes the order is based on a random draw. But the loans have no interest.

In the following months, the members who have received the loans start to pay their installments. And you get the idea. The snowball gets bigger and bigger.

Sometimes not all of your installments go toward your loan principal. In some cases, they put a certain amount of the installments aside and invest it (usually on gold), and this investment belongs to the entire family. Obviously, when you decide to leave the company, you either pay your debt in full or you cash out.

The company also keeps a reserve fund in case someone has an emergency need for a loan or is unable to pay his installments for a couple of months.

Just a Pair of Boots

(As told by an SIT employee)

Cooperatives can also be a place of excellence. As an example, it’s very hard to beat the experts at Mountain Equipment Co-op for camping or outdoor gear. I remember that when I lived in Ottawa the winters were very cold, and I went to Mountain Equipment Co-op to look for a pair of winter boots. I was very impressed with the expertise of the staff. On their advice, I purchased a pair of Sorel boots that I still use today. I love them. I’ve since bought other products from Mountain Equipment Co-op and have been very happy with them.

The Merry-go-round

(As told by an SIT employee)

Shortly after university, and following a year-long stint at a small publishing house, I was offered a position at an international development agency in downtown Toronto. They had an idea for a new book and needed a ghostwriter. Someone who could collect stories and occasionally cover a weekly column in a couple of national newspapers. I took the job in March, and wrote a few articles on current international issues—settlements in the West Bank, India’s ambitious census, Google’s self-censorship in mainland China. I interviewed a Palestinian doctor who was preparing for the launch of his memoir—a man who recently lost three of his daughters when an artillery shell from an Israeli tank blew apart his home.

And then, in June, I boarded a plane.

I flew to Africa and spent the next month travelling back and forth between my compound and a number of small rural communities in Kenya. By the end of the month, I climbed into a van and took the five hour journey south through the open savannas of the Great Rift Valley and into the Maasai Mara—a wildlife reserve that stretches south into Tanzania where it becomes the Serengeti.

One afternoon at the end of June, a Kipsigi tribeswoman, Jane, invited me into her home. A crude brick structure nestled between the green hills and the rushing brown water of the Mara River. All the other homes in the region were more traditional—mushroom like structures made of mud and cow dung, each with a thatched roof.

Jane was proud of her home. It was the only one in her area made of brick, she told me, holding her chin high. She worked hard for it, saving money she had put aside from the merry-go-rounds.

What’s a merry-go-round? I asked.

The merry-go-round is a cooperative model that is gaining momentum in rural Kenya. In the small village of Emorijoi, the local women gather together once a month. They pool their money together. Everyone provides an equal share of Kenyan shillings, and at the end of their meeting the money is given to one of the women. She can do whatever she wants with it, Jane said. And the next month, it will be another woman’s turn.

With each merry-go-round, Jane buys something for her family. She has a garden full of vegetables, the seeds purchased with the money she earned from a merry-go-round a while back. She has fruit trees. Bananas, mangoes. She bought the materials for a water purifier. It drips steadily—so the water that’s contaminated with Cholera and Typhoid, the same water that she collects from the Mara River every morning, can now be turned into clean drinking water for her family.

And, of course, Jane has her home. The only home in Emorijoi made of brick. All thanks to the merry-go-round.