Credit unions promote powerful program that builds financial literacy and assets at the same time

Can a financial literacy program deliver knowledge and shift behaviours so that people living on low incomes can make informed decisions when it comes to their personal finances?

Credit unions think so. One way that several are doing this is through matched savings programs. Matched savings or individual development accounts are an effective approach to improving the financial capability of low income members, while at the same time matching members’ savings towards a goal such as home ownership or education. By participating in these programs, members gain valuable saving skills and improve their economic well-being.

To help credit unions develop these programs, the trade association for Canada’s credit unions recently introduced the Matched Savings Program Toolkit, which is its latest social responsibility resource.

The toolkit highlights the role of financial institutions in matched savings programs drawing on examples of programs like learn$ave. It walks credit unions through how to plan, implement, administer and measure a matched savings program. It also features a useful checklist of best practises and items to consider for each element along the way.

Affinity Credit Union, Assiniboine Credit Union, Vancity Credit Union and Social and Enterprise Development Innovations have generously shared resources including financial literacy curricula, program calendars, program guides and metrics for assessing the impact that these programs have. These resources are organized in the toolkit’s appendices.

How did this idea for the toolkit originate?

Credit unions are different from other financial institutions. For instance, credit unions are guided by international co-operative principles, one of which is to provide members with “education, training and information,” including the skills and confidence members need to make responsible decisions when it comes to managing their personal finances.

In 2012, credit unions across Canada, set out to gain a better understanding of financial literacy programs, approaches and offerings. In particular, the credit union system wanted to know whether financial literacy programs were effectively bridging the gap between what members knew they should be doing, and how they actually managed their finances. The results of this project are highlighted in the research brief, Financial Literacy – What’s Best and What’s Next.

Through this system-wide financial literacy project, matched savings accounts were identified as an effective way to help low-income individuals grow their assets and increase their financial knowledge. The program matches every dollar participants save on their own.

The Matched Savings Program Toolkit was prepared by Kate Martin, Policy Analyst, Credit Union Central of Canada. Click here to download the toolkit.

About Credit Union Central of Canada (Canadian Central)

Credit Union Central of Canada is the national trade association for the Canadian credit union system. Canada’s credit union system is a vital competitor in the financial services industry. Canadian Central represents five regional Centrals and one Federation representing 332 credit unions with more than $159.2 billion in assets and serving over 5.3 million members, outside of Quebec. For more information about Canada’s credit union system and Canadian Central visit www.cucentral.ca.