Korean Credit Unions Grown with Support... Now Providing International Aid

Actively Supported by Catholic-Related Institutions in Early Establishment
Grew to Asia's Largest and World's Third Largest Asset Scale
Engaged in Various International Aid Including Donation Payments

The National Credit Union Federation of Korea (NACUFOK), which succeeded in securing a fourth consecutive term as the first president of the Asian Confederation of Credit Unions (ACCU), was established independently without government support, unlike other mutual financial sectors such as Nonghyup, Suhyup, and Saemaeul Geumgo. Instead, with international support, NACUFOK has grown to become the third largest in the world and the largest in Asia in terms of asset size among the member countries of the World Council of Credit Unions. As it has grown to a global scale, it is taking the lead in supporting countries in the Asian region.

Korea’s first credit union, established in 1960, began with the help of the Catholic Church. Sister Mary Gabriella gathered 27 members, including staff from Busan Maryknoll Hospital and Catholic parishioners, to establish the Seongga Credit Union. In the same year, Father Jang Dae-ik founded the Catholic Central Credit Union in Seoul for church members.

From 1962 to 1965, the Second Vatican Council was held, during which active support from Catholic institutions was realized. The council formalized the church’s role beyond religious purposes to address social issues. The Misereor fund, established by the German Catholic Bishops’ Conference, greatly contributed to the development of Korean credit unions. Among the 13 institutions that provided financial support to Korean credit unions, more than half?7 institutions including the Roman Curia’s Congregation for the Evangelization of Peoples and the German Misereor Foundation?were related to the Catholic Church.

Misereor also generously supported the establishment of the federation hall and training center for regional credit unions (now NACUFOK). In 1972, it provided approximately 38 million KRW for the hall and about 700 million KRW for the training center as grants. In addition to Misereor, until 1981, organizations such as the Credit Union National Association (CUNA) of the United States, the Christian Reformed World Missions, and Rabobank continued to provide financial and operational assistance to Korean credit unions.

On the 6th, Korean participants waved the Taegeukgi at the 2024 Asian Credit Union Confederation (ACCU) Forum held in Bali, Indonesia.
[Photo by Shinhan Central Association]

External aid was also provided during the formation of the federation. Former NACUFOK Chairman Lee Sang-ho attempted to establish the federation in a private-led manner that did not rely on external aid. The plan was to cover operating and education expenses partially through membership fees from individual credit unions. Nevertheless, initial funds were secured through support including 500,000 KRW from the Asia Foundation and $7,500 from CUNA, the Korea Relief Association, and the Catholic Busan Diocese.

Having received international support and continued growth, Korean credit unions have become world-class credit cooperatives. Last year, marking the 63rd anniversary of Korea’s first credit union establishment, Korean credit unions recorded total assets of approximately 150 trillion KRW (149.7 trillion KRW). This ranks first in Asia and third globally, following the United States and Canada.

The National Credit Union Federation of Korea, which grew through international aid, especially spares no effort in supporting credit union activities in the Asian region. As the ACCU presidency country, it is promoting various activities together with the Credit Union Social Contribution Foundation. First, it directly collects donations and supports credit unions in various Asian countries. As of the end of June, the Social Contribution Foundation had directly donated $350,000 (about 500 million KRW) to ACCU member countries. These funds are used to support ACCU programs such as business development service projects, leadership programs, and the Asian Credit Union Leaders Network. Training programs that share NACUFOK’s development know-how are also operated. Leni, ACCU Secretary General, told this publication, “The 23 member countries want to emulate the systematic central federation functions of Korean credit unions,” adding that there is particularly strong demand to learn from Korean credit unions through leadership programs. In fact, in May, 21 members of the Asian Credit Union Executive Committee from 18 credit unions, including those from Indonesia and the Philippines, visited NACUFOK and completed a training program studying the Korean credit union system.

In addition, volunteer activities targeting Asian countries and overseas volunteer work in 2019 involving the Philippine Federation of Credit Unions and NACUFOK executives and staff included educational activities at schools located in areas where Philippine credit unions operate. Although these activities were suspended due to the COVID-19 pandemic, they are planned to be resumed. Medical support volunteer work was conducted at credit unions in Mongolia, Sri Lanka, and Nepal, and a vocational training center was established in Cambodia.