Modelling the Performance of Irish Credit Unions, 2002-2010

Abstract

This study undertakes a modeling based performance assessment of all Irish credit unions between 2002 and 2010, a particularly turbulent period in their history. The analysis explicitly addresses the current challenges faced by credit unions in that the modeling approach used rewards credit unions for reducing undesirable outputs (impaired loans and investments) as well as for increasing desirable outputs (loans, earning assets and members' funds) and decreasing inputs (labour expenditure, capital expenditure and fund expenses). The main findings are: credit unions are subject to increasing returns to scale; technical regression occurred in the years after 2007; there is significant scope for an improvement in efficiency through expansion of desirable outputs and contraction of undesirable outputs and inputs; and that larger credit unions, that are better capitalised and pay a higher dividend to members are more efficient than their smaller, less capitalised, and lower dividend paying counterparts.

Examining the disclosures on the websites of English credit unions

“…Credit union websites were used rather than their annual reports because the websites are more likely to contain information about the types of products, services and information offered by individual credit unions, which is less likely to be available in annual reports (for an example of the use of credit unions' websites as a source of research data, see McKillop and Quinn, 2015). This is not to deny, however, that credit unions' annual reports do have a role, especially in terms of providing information to their members about the financial position and performance of the credit union (for an example of the use of annual reports in credit union research, see Glass et al, 2014). The main limitation with this research is that credit unions' websites disclose a limited amount of information.…”