HispanicBusiness

For credit unions in the United States, offering services to Latino immigrants is not only an attractive alternative but also an essential strategy for the growth of those financial institutions, experts say.

"The Latino community is the biggest, fastest growing minority market, but one that is underserved by credit unions," according to Ahmee Vang, specialist in remittances at the World Council of Credit Unions, or WOCCU.

The reason, she told Efe, is that "a misconception exists that we have to wait until the Latino market adapts to the services we're offering. But that's not the way it is."

"Nor is it enough just to want to serve immigrants. You have to realize that if you want to grow, you have to reach that market. And that is exactly what credit unions are doing," she said.

Credit unions, non-profit organizations that provide financial services, are grouped in state leagues, which in turn form part of the Credit Union National Association and WOCCU.

Statistics compiled by WOCCU show that in 2008 remittances worth $307 billion were sent from the United States, of which $67.5 billion went to Latin America and the Caribbean.

Nonetheless, "credit unions have moved very slowly in serving immigrant populations that send these remittances," Vang said.

For that reason WOCCU created a remittance program for credit unions to encourage these institutions to offer Latinos low-cost transactions for international remittances and check-cashing.

Credit unions that adopted this program have seen immediate benefits, Vang said, including in states with a low percentage of Latinos such as Iowa, where Hispanics make up only 4 percent of the 3 million inhabitants.

The Iowa Credit Union League says that many of its members "have experienced sustained growth both in assets and in members since they began to offer services to the Hispanic community."

"Hispanics have a high level of participation in the labor force, their family incomes are on the rise, their purchasing power is also growing and they are ambitious. These are all elements that prompt credit unions to have more Hispanic members," Patrick Jury, president and general manager of ICUL, said.

Jury referred to the specific case of Jose Francisco Batres and Martha Alarcon, who moved to Des Moines, Iowa, from Veracruz, Mexico, six years ago. The couple works 14 hours a day in a restaurant.

A few months ago, Batres and Alarcon became members of Village Credit Union of Des Moines, in order to send money to Mexico.

Later they opened a savings account and eventually were invited to serve on the Hispanic Advisory Council of Village Credit Union, which "immediately understood the value of providing services to this sector with its rapid demographic growth," Jury said.

In fact, new Hispanic members brought in more than $8 million to that institution.

Meanwhile Des Moines Metro Credit Union managed to reverse its loss of members by concentrating on Hispanic immigrants, to whom it offered $500 loans to establish their credit.

Vang said that remittances are "the starting point" that "later lead to the use of other services like direct deposits and eventually business loans."

She stressed that credit unions do not compete with traditional financial institutions, but are "an alternative" for the Hispanic community, although, she said, the goal is "to win and maintain a loyal market."

To do that, she said, credit unions and banking institutions in general must have three elements: a specific marketing plan for Hispanics, personnel trained in Latinos' financial needs, and programs of education in finance for immigrants.