To read the full version of this content please select one of the options below:

Credit Unions and Demutualisation

Kevin Davis (Common wealth Bank Group Chair of Finance, Department of Finance, The University of Melbourne. Email:

Managerial Finance

ISSN: 0307-4358

Article publication date: 1 November 2005



This paper reviews experience with credit union demutualisation to date in the light of increasing discussion about whether demutualisation is a likely (or inevitable) future stage in the evolutionary process. It is argued that the credit union industry faces an inherent demutualisation bias which emerges as the sector develops maturity. Contributing factors include the emergence of professional management pursuing personal objectives, together with the economic realities of technological change, financial liberalisation, increased competition, and prudential regulation based on minimum capital requirements. Demutualisation incentives may partially reflect the unsuitability of the mutual form of governance in larger, more sophisticated financial institutions, but there is also a significant risk of demutualisation based on wealth expropriation motives. Alternative policies and strategies which might avoid this demutualisation bias are examined.



Davis, K. (2005), "Credit Unions and Demutualisation", Managerial Finance, Vol. 31 No. 11, pp. 6-25.



Emerald Group Publishing Limited

Copyright © 2005, Emerald Group Publishing Limited