Credit unions are typically viewed as financial intermediaries that differ from commercial banks only in terms of their institutional structure. This ignores their historical development as mutual self-help societies. The distinctive feature of a credit union is taken in this paper to be the provision of insurance - membership gives access to credit in the event of a negative income shock. Banks do not provide such loans because of the low credit worthiness of such borrowers. The application of the model to those credit unions designated as low-income in the US allows them to be broken up into distinct types. Copyright CIRIEC, 2005.
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