Industry Analysis & Industry Trends
Like the rest of Australia's Finance subdivision, credit unions have been hurt by the global financial crisis and the slowdown in the economy in 2008-09. Their mutual status, prudent lending and heavy reliance on deposits for funding have shielded the industry to some extent, but the past five years have been difficult nonetheless. As the Australian economy transitions from an emphasis on mining to non-mining sectors, the Reserve Bank of Australia has cut interest rates to historic lows. This has negatively affected revenue generated from lending portfolios. Even more detrimental was the effect of credit unions leaving the industry and taking portions of the revenue and asset base with them. As a result, industry revenue is forecast to decline at an annualised 10.4%... purchase to read more
Industry Report - Starting a New Business Chapter
Barriers to entry in the Credit Unions industry are high. The regulatory requirements imposed on potential entrants, the difficulty in accessing funds, the presence of credit unions' branch networks in potential markets and the difficulty in attaining and retaining a loyal customer base are all barriers to entry.
The regulatory requirements imposed on credit unions and any potential businesses wanting to enter the industry are highly stringent. This makes it difficult for new entrants to set up operations and compete successfully. Furthermore, because of the global financial crisis, the industry's regulatory framework is set to become more complex as the government introduces legislative changes to prevent future crises, which will no doubt affect the industry... purchase to read more