Research Article Four:

TRANSFORMATIONAL CHANGE OF COOPERATIVE CREDIT UNIONS

IN BANGLADESH TO A NEW PARADIGM

Liton Hubert Gomes^1&2

The Graduate School, University of Santo Tomas, Espana St. Manila, Philippines¹;

Notre Dame College, Dhaka, Bangladesh²

This pioneering research describes how the New Credit Union Development Model (NCUDM) as a tool transforms traditional credit unions in Bangladesh to a new paradigm through the mixed methods approach (quantitative and qualitative) with data coming from all available sources, such as printed and online records from The World Council of Credit Unions, Inc. (WOCCU) and Association of Asian Confederation of Credit Unions (ACCU) online data and records, The cooperative Credit Union League of Bangladesh Limited (CCULB) archives and audited records, government agencies for the cooperative regulation in Bangladesh, member-Credit Unions, research forum, focus group discussion, expert panel, in-depth interviews, and from Credit Union directors, operating staff, regular members and other stakeholders.  Since this research purports to create baseline data on the NCUDM in Bangladesh, the researcher opted to establish explicit parameters through the definition and explanation created by previous researchers. With these the researcher explores the factors that help credit union to transform to a new paradigm. The researcher explains the meaning of transformational change and the new paradigm in credit unions as social field. With the help of previous researchers, this research determines the phenomenon of the nine attributes of the NCUDM and its distinction from traditional concepts. From the collective demonstration during the focus group discussions, the researcher notes the twelve components of business environment performance (BEP) issues that are important for CUs in Bangladesh.

The research identifies nine important attributes of the NCUDM and grouped them into three clusters: (1) Business Culture:  Ideology; (2) Operational Management: organization, human resource, operating environment, marketing; (3) Financial Management: member savings, member loan, financial discipline and financial structure. With direct participation of 450 respondents, the research assessed fifty-four identified components of the nine important attributes to compare among large, medium, small and all CUs to find out how viable the NCUDM is and determine the future direction of the attributes in Bangladesh.  Results conclude that there are significant differences in ideology, organization, human resource, operating environment, marketing, member-savings, member-loan, financial discipline and financial structure to adopt the new paradigm. This implies that large, medium and small CUs have different business management performance on the nine important attributes. In a similar direction, the research assessed twelve identified components of BEP to compare among large, medium, small and all credit unions in order to find out how viable the NCUDM and determine the future direction. Results conclude that there are significant differences in components of BEP to adopt the new paradigm. This implies that large, medium and small credit unions have different business environment performance on the twelve particular components.

The assessment of the relationship and strength of a linear association between attributes of the NCUDM and the components of particular BEP shows that there is significant correlation among attributes and components in the new paradigm in Bangladesh. Results conclude that the nine attributes are anchored differently on its strength (strong, moderate and weak). Meanwhile, the twelve components of the BEP are also anchored differently on its strength (strong, moderate and weak) and there is no negative linear association. This signifies that the nine attributes are important to the NCUDM, appropriate well-fit model with data, and favorable as accepted for Bangladesh.

This research provides some starting points for future studies in the area of business for those who would like to investigate the NCUDM performance in Bangladesh. It provides new empirical evidence for regulatory agencies, especially the CCULB to improve and transform credit unions in Bangladesh to a new paradigm using the NCUDM. While this research generates interesting findings relative to the portrait of the NCUDM in Bangladesh, still many gaps are identifiable. The findings that surfaced in this research on the transformation of credit unions in Bangladesh to the new paradigm called NCUDM can serve as baseline data as spring board for more investigations making use of both quantitative and qualitative approaches. Increase in the volume of research on the topic is still needed to fill in the gaps concerning nature, scale, determinants and implications of this important financial industry. 

Correspondence concerning this article should be addressed to Liton H Gomes. Electronic mail may be sent via internet to gomes_liton@yahoo.com.