Credit unions and thrift societies may be referred to as the coming together of a group of people with common interest who have agreed to pool their resources together from which loan facilities are made available to members at an agreed rate of interest. The contributions or savings of members may be weekly, monthly or quarterly. These associations are common among people in the same business or line of trade. It encourages loan to be given to members from a pool of fund at a very low interest rate.


Aims of Credit Unions and Thrift Societies

  1. To encourage savings habit among members.
  2. To provide loan at a very low interest rate.
  3. To assist in asset acquisition by members.
  4. To ensure payment of dividend to members.
  5. To assist members who are in need.



Credit unions and thrift societies are formed by a group of people with a common objective. It is formed voluntarily and is open to anybody who is interested. They are not incorporated but may be registered. The society is a democratic association in which members contribute according to their ability and capacity. Members will elect officers to run the affairs of the societies.


Sources of Fund to Credit Unions and Thrift Societies

  1. Shares purchased by the members.
  2. Registration fees paid by new or incoming members.
  3. Fines imposed on defaulting members, e.g. absence from meeting may attract a fine.
  4. Loan can be obtained from financial institutions.
  5. Deposits of members.
  6. Part of dividend called, retained earning.
  7. Interest on loan given to members.



  1. Encouragement on Saving Habit: The societies encourage members to save part of their income.
  2. Provision of Loan Facilities: The societies grant loan to members who may want to borrow money at a very low interest rate.
  3. Enlightenment of Members: Members are enlightened about the latest development in thrift operation through constant meetings.
  4. Payment of Dividend: Another service provided to members is the payment of dividend from surplus fund.
  5. Loan can be Obtained from Banks: The society can act as an entity to obtain loan from financial institutions to finance business.
  6. Foster Close Relationship between Members: Credit union ensures close relationship between members as a result of personal interactions.
  7. Render Help in Time of Need: Members are helped by the societies in time of need.
  8. Encourage Increased Standard of Living: Members can save and obtain large loan to finance businesses which can increase their standard of living.

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