COVID‐19 and credit unions: CSR approaches to navigating the pandemic

Abstract

The financial sector plays a fundamental role in Canadian society; credit unions, in particular, cater to a specific group of stakeholders not commonly served by traditional financial institutions. This research investigates the social responsiveness (CSR2) approaches implemented by credit unions during the pandemic, the type of actions implemented, the stakeholders assisted, and whether the size of credit unions may affect their responses. Data were collected from the 100 largest credit unions from nine Canadian provinces and assessed through qualitative content analysis. Results show that Canadian credit unions have implemented accommodative and proactive approaches when addressing COVID‐19, through more operational than financial actions directed to their clients and employees, and that those with larger assets implement a greater number of actions compared to credit unions with smaller assets. More importantly, results show that traditional CSR2 approaches (e.g., RDAP) do not fit unexpected crises, so novel approaches are required to face future crises and remain resilient. While we aim to contribute to the body of literature by examining how credit unions have assisted their stakeholders during the pandemic, we also, and most importantly, seek to provide material for discussing and reflecting on how organizations are prepared to face crises that will likely arise in the future.

Cooperative resilience: Toward a heuristic model of collective action in a crisis

“…However, the actions emphasize the agility of credit unions. This means that in a crisis, they were able to respond quickly and imaginatively to the needs of their members by altering their modus operandi (Al‐Zyoud & Ordonez‐Ponce, 2021; Jones et al., 2020).…”

“…Similarly, empirical studies reported that, in response to COVID‐19, cooperatives changed their business activities to service gaps left by other organizational forms (Cooperatives Europe, 2020; Tortia & Troisi, 2021). A small number of empirical studies have examined the responses of credit unions to COVID‐19 in Canada (Al‐Zyoud & Ordonez‐Ponce, 2021), in Britain (Jones et al., 2020), and in Ireland (Money & Mooney, 2020) finding that they altered their modus operandi in timely manner; however, these studies do not examine how credit unions responded as they did. Neither do they provide a comprehensive investigation of the capabilities enabling resilience in cooperatives.…”

“…However, as noted in the section on credit unions and resilience, although credit unions have responded positively to crisis situations by altering their modus operandi (Al‐Zyoud & Ordonez‐Ponce, 2021; Jones et al., 2020), little is known about how credit unions responded as they did. Moreover, the literature lacks qualitative insights into how resilience capabilities can be translated into agile responses (Conz & Magnani, 2020).…”

“…The second is empirical. Studies describe the functional actions taken by credit unions in response to COVID‐19 (Al‐Zyoud & Ordonez‐Ponce, 2021; Jones et al., 2020; Money & Mooney, 2020); however, do not examine how credit unions were able to respond as they did. This gap is more widespread, as identified by the literature review undertaken by Conz and Magnani (2020), who called for qualitative studies to explore the specific mechanisms that build organizational resilience into business practices.…”

Navigating the economic fallout of COVID-19: A study of credit unions financial ratios in Ecuador

“…It's important to consider how to minimize the negative impact of the crisis. Credit Unions have adopted numerous strategies to combat with the economic fallout of the Covid-19 pandemic (Al-Zyoud & Ordonez-Ponce, 2022). Several Credit Unions have implemented accommodating strategies such as debt restructuring, liquidity management, and digitalization (Nguyen et al, 2022).…”