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Connexus : Issue 37
www.abacus.org.au 47 Connexus Beating the odds Credit unions are active and developing in the Federated States of Micronesia (FSM) despite a lack of proper regulation being a major obstacle to growth. With the support of the international credit union community, they hope to become a leading example of a thriving credit union movement in the Pacific. Micronesian credit union representatives are planning to attend this year's Pacific Credit Union Technical Congress in Papua New Guinea, in September, where they would appreciate the opportunity to meet with participants from the Australian movement to benefit from their experience. Micronesia is a sovereign nation made up of the island states of Pohnpei, Chuuk, Yap and Kosrae. It has a population of about 111,000 people. There are credit unions on all islands, the most active being Mesenieng Credit Union (MCU), located in the small Pohnpei town of Kolonia. MCU, founded by four citizens in 1969 as a savings club, has grown to be Micronesia's largest credit union. At least 40 per cent of its 2,195 members are women and it has assets amounting to US$4.25 million and total capital of US$1.96 million. With no laws recognising credit unions in FSM, MCU is forced to operate under the Bank Act. It means the credit union is restricted to offering loans as the only financial service available to members. If it was to take deposits, it would be subjected to the same regulations that govern banks -- including high capital adequacy requirements. MCU has strengthened its connections with other credit unions in the Pacific by becoming a member of the regional peak body, the Oceanic Confederation of Credit Union Leagues, and attending the third Pacific Credit Union Technical Congress last year. With CUFA's support, a meeting was arranged with the Bank of FSM's commissioner, at which MCU's manager represented the national credit union movement. There were fruitful discussions about the steps necessary for moving towards the introduction of appropriate regulation. -- Finau Elder is the secretariat officer of the Oceanic Confederation of Credit Union Leagues. Making progress with regulation is a priority for credit unions in Micronesia. By Finau Elder