laenuühistu

Laenuühistu is an Estonian term that translates to "credit union" in English. It refers to a member-owned financial cooperative that offers financial services to its members. Like banks, laenuühistud provide services such as savings accounts, loans, and payment processing. However, the key difference lies in their ownership structure.

Instead of being owned by shareholders, a laenuühistu is owned by its members, who are typically individuals or small businesses within a specific community or professional group. This member-centric approach often leads to a focus on serving the financial needs of its members rather than maximizing profits for external investors. Profits generated by a laenuühistu are usually reinvested back into the cooperative to improve services, lower fees, or offer better interest rates to members.

The governance of a laenuühistu is democratic, with members having a say in the cooperative's operations and decision-making, often through voting at member meetings. This structure aims to ensure that the institution operates in the best interests of its membership. Laenuühistud can play an important role in local economies by providing accessible financial services and fostering a sense of community among their members. They are regulated by financial authorities to ensure stability and consumer protection.