Sustainability of Credit Union: A Systematic Review of Measurement and Determinants

Abstract

Credit union is considered as an alternative solution for global poverty and financial inclusiveness for social development. However, to achieve this goal, first and foremost a credit union must be sustainable. The purpose of this paper is to provide a systematic literature review on the key determinants of sustainability of credit unions and its measurements through comprehensive literature search and assessment based on the PRISMA-P guidelines. The findings reveal standard quantitative measures such as operations of self-sufficiency ratio, financial sustainability score, return on assets and pearl index (two studies qualitatively assessed governance structure and membership rate as measures). Additionally, key factors such as efficiency, loan management factors, deposit mobilization, portfolio at risk, credit risk, regulatory environment, and asset factors are significant determinants of sustainability of credit unions. The findings suggest a great need for complementarity of role and responsible conduct of the key stakeholders (members), staff, management and enabling regulatory environment for sustainable credit union.