Historically, financial institutions have not been good providers of loans to people with low incomes. Poor people are forced to borrow money at very high interest rates. They still need credit because of low wages and poor provision of housing, medical help and other basic requirements, but the choices available are unsatisfactory.
Different kinds of mutual aid organisations have appeared to solve this problem, where members agree to help each other. There was a fast growth of these organisations among working class people in countries which industrialised in the 19th century. In Britain, they took the form of “friendly societies” and trade unions. Some friendly societies existed to help members who had fallen ill or had some other problem, others organised social or cultural events. Some collected money to build homes for their members, and this type became known as a “building society” in Britain. An approximately equivalent type of organisation in the USA is called a “credit union”.
This video is from a programme about a new way of developing business finance for organisations based in the internet.
The presenter, Laura Flanders, asks Nathan Schneider "how are these new systems different from credit unions?"