The research reported here evaluates the relative importance of growth in members vs. assets per member in the overall growth in credit union assets. It also evaluates how this relationship varies with the size of credit unions. The analysis is based on call report data for federally insured credit unions for the eight year period 1993-2001. Growth rates in assets and assets per member are adjusted for inflation so that only real growth rates are reported. We find that for credit unions overall, the larger the size of a credit union, as measured in assets, the faster the subsequent growth rate in assets. This occurs primarily because larger size is associated with faster subsequent growth in membership, whereas there is no strong relationship between size and subsequent growth in assets per member.
Further analysis indicates that this does not mean that smaller size necessarily hinders subsequent growth. When we evaluate the top and bottom 20% of credit unions in each of eight asset-size categories, we find that for the fast growers, asset size is not strongly related to subsequent growth in assets or members for most asset sizes.
Therefore, smaller size is not necessarily a hindrance to subsequent growth. For fast growers in most asset sizes, membership growth contributes more to overall asset growth than growth in assets per member. Both are significant, however, and for the smaller assets sizes growth in assets per member is as important as growth in members.