Usaldusühingud

Usaldusühingud, also known as credit unions in English, are financial cooperatives owned and controlled by their members. Unlike banks, which are for-profit entities, credit unions are not-for-profit organizations. They were established in the United States in the early 20th century as a response to the lack of banking services for rural and working-class communities. The concept of credit unions has since spread to many other countries, including Estonia, where they are known as usaldusühingud.

The primary purpose of a credit union is to provide financial services to its members, such as savings accounts, loans, and insurance products. Credit unions are typically member-owned and member-controlled, meaning that members have a say in the organization's decisions and are entitled to dividends if the credit union is profitable. This democratic structure sets credit unions apart from traditional banks.

One of the key features of credit unions is their commitment to the community. They often prioritize lending to members and small businesses, and they may also offer educational resources and financial literacy programs. Credit unions also tend to have lower fees and more favorable interest rates compared to banks, as they are not driven by profit motives.

In Estonia, usaldusühingud have played a significant role in the financial sector, particularly in rural areas where traditional banking services may be limited. They have contributed to financial inclusion and have helped to promote a more cooperative and community-oriented approach to banking. However, like any financial institution, usaldusühingud are subject to regulation and oversight to ensure their stability and the protection of members' funds.