One credit union's meaningful impact on African American consumers
Each February, Inclusiv recognizes the amazing work that credit unions in African American communities do year-round to serve their members and to help bridge the racial wealth gap.
In partnership with the African-American Credit Union Coalition, Inclusiv is celebrating Black History Month again this year by producing a collection of stories from our members highlighting the important role these credit unions play in the lives of the communities they serve.
One such example is Phenix Pride Federal Credit Union of Phenix City, Ala. Many rural residents in this eastern Alabama community are self-employed. But small loans to help people start an auto supplies shop or a lawn service, for example, are often not available from banks—a need that Phenix Pride FCU has successfully met for many years.
With the support of a progressive board of directors that is readily open to new ideas, CEO Kimberly Nichols has brought the credit union from $2 million in assets to $10 million. That includes having expanded from serving just its original sponsor group, a local hospital, to serving the entire community, with membership now topping 2,000. “It's a very high-poverty county," said Nichols, "and we serve people of lower means.”
The credit union makes small loans that many banks shun, especially to local entrepreneurs starting new businesses. Phenix Pride FCU will lend to “the retired guy who wants to do a yard business or someone who wants to start a hair salon. It doesn't take much money at all,” said Nichols, “but they still can't get it from banks – especially if they have less-than-perfect credit."
Phenix Pride member Frederick Cochran, a Navy veteran of 14 years, took out a small business loan in 2007 to fund his dream of selling custom wheels and tires, car audio and furniture. Since receiving his first loan, the business has expanded, adding multiple locations and different business lines, including car sales. “The loans got a little bigger each time, because he's growing,” says Nichols. “We've been helping him for about 12 years now. He started with nothing and now he has a thriving business,” which he hopes to pass on to his children someday.
The credit union’s overall performance has been strong, due in part to its high lending efficiency. “Honestly, I look at us as a little anomaly,” said Nichols. “For a $10 million-asset credit union, we have 12 employees, while another credit union our size might have three.”
Phenix Pride offers a wide range of electronic services, such as mobile banking, and new technologies continue to be introduced to members with the aid of grants from National Credit Union Administration and the U.S. Treasury’s Community Development Financial Institution Fund. Once these services are launched, the credit union is able to sustain them with its own resources.
Phenix Pride has excellent financial performance; the credit union is 90 – 95% loaned out and has an ROA of between 1% and 2%. They and other credit unions serving African American communities are thriving while also providing access to safe and affordable financial services.
Please join Inclusiv and our member credit unions in celebrating and honoring the financial inclusion and economic empowerment work these credit unions do this month and throughout the year.