Are Credit Unions Doing Enough to Help Young Entrepreneurs?
For years credit unions have pursued the goal of “getting younger”—and for good reason. With the average credit union member’s age hovering in the late 40s, Gen Y (18–35-year-olds) represents a prime opportunity for credit unions to continue the legacy of cooperative finance among newer generations. However, focused initiatives are seldom consistently deployed to execute these aspirations. It’s easy to stake a claim, but what are you doing to further that?
As student debt skyrockets to record levels and young adults struggle with un- and underemployment, entrepreneurship is becoming a viable option for many. Starting a business is gratifying and self-fulfilling, but it’s also filled with capital challenges and strategic roadblocks. By supporting young adults in their endeavors to become small (or large) business owners where others may not, credit unions can foster loyalty among these members.
Lending to young entrepreneurs isn’t always feasible or realistic; 18–35-year-olds often lack the necessary credit history to obtain capital, and their ventures may not include tangible assets or collateral. As a result, many credit unions are unwilling and unable to take on the risk of providing financial support. With that in mind, Filene has identified several initiatives credit unions can implement to support young entrepreneurs when lending isn’t a viable option.
Credit unions around the country are experimenting with creative solutions to help young entrepreneurs develop their business ideas. Financial education and seed funding competitions are among the most popular. Other promising initiatives detailed in this report include:
- Offering work space
- DIY tools and applications
- One-on-one mentoring/counseling
By implementing these solutions, credit unions can provide young entrepreneurs with the education they need while helping to develop traits such as financial risk tolerance and entrepreneurial intent.
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