Caisse populaire means ‘people’s bank’ in French and is interchangeable with the English term ‘credit union.’ Caisse populaire is used mainly in France and in French-speaking areas such as Canada and some parts of Africa. A credit union is a type of financial institution that focuses on member benefits over profit and expansion. They differ from banks in two key ways—a credit union is owned by its members rather than a secondary company and it is generally a non-profit organization. The benefits of these two differences translate to higher rates of interest on accounts and lower rates on loans.
These institutions began in Europe during the mid-1800s, but the first one in North America was the Caisse Populaire de Lévis in Quebec, Canada. This caisse populaire opened in 1901 and quickly became the preferred banking method for many Canadians. In fact, Canadians use more credit unions per capita than any other place in North America.
Credit unions provide very similar services to a standard bank. Normal savings accounts, checking accounts and so on are all available through a credit union. In most cases, the institution is run by a board and members may vote on many decisions. Members receive one vote regardless of the amount of money invested, creating an equal field for all members.
Often, a caisse populaire reinvests its money in the community in which it works. This furthers the idea that its members are working as a collective to improve their local way of life. Some credit unions are so large that local takes on a new meaning and they will help specific states or provinces as a whole rather than single communities.
Due mainly to their member-oriented ideals and their uniform equality, credit unions are on the forefront of microfinance economics. Microfinance focuses on people with little money or access to financial services. These people are unable to generate enough financial power to lift themselves out of poverty on their own. While some instances of this may be found in North America, the majority of these types of credit unions are found in the third world.
The caisse populaire principle of helping the community applies strongly to this group. These organizations specialize in microtransaction loans. These loans are generally no more than a few hundred US Dollars (USD), but they may give a person the ability to start a business or pursue an education.