Lending

Want to Boost Loans? Increase Member Loyalty

CUs likely will have negative loan growth in 2010—the first time that’s happened in 30 years.

November 16, 2010
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CUNA projects there will be negative loan growth (0.1%) in 2010—the first time in 30 years that loan growth has been in negative territory.

Behind the lending downturn is high unemployment, a protracted recession, and a desire by members to pay off existing debt before taking on any more.

As if these challenges weren’t enough, credit unions are dealing with a shrinking pool of strong potential borrowers (members ages 25 to 44), which limits lending opportunities even further.

Some credit unions have discovered the best way to grow their loan portfolios is to capture loans members have gotten from other lenders. To do this effectively, credit unions first need to increase members’ loyalty, according to CUNA’s Member Survey Benchmarking Database and its Credit Union Member Satisfaction, Growth, and Loyalty benchmarking report.

The Ohio Credit Union League’s eLumination Newsletter examines the future lending landscape and what credit unions must do to be successful during these trying times.

“Loan demand isn’t going to grow, and most likely it will continue shrinking. Therefore, the key will be growth through taking market share from other financial institutions, rather than waiting for new demand.”

The opportunity is clearly there for the taking. At least half of members with loans got those loans from a lender other than their credit union, according to CUNA’s Member Survey Benchmarking Database:

Market Shares

The eLumination article points out, “Credit unions that find ways to capture existing loan market share will enjoy a future in the credit union movement. Many are having success through diligent efforts to leverage member data to solicit new lending.”

Next: Exploit member data

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Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory (www.appreciationatwork.com/assess) will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

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