How did the credit union idea originate?
A. 1849 is generally accepted as the year that the first credit union was organized. Friedrich Wilhelm Raiffeisen, mayor of a small German town whose inhabitants had suffered heavy financial losses due to a crop failure and a depression, conceived the idea. He believed that by pooling small sums of money, a fund could be established from which loans could be made at a low rate of interest. Now, as then, credit unions offer small loans that other financial institutions would consider too small for processing.
