Cheng Lee-ming lost badly buying shares in an online bank in the United States last year, but it gave him a timely jolt, prompting him to cash out of riskier assets before the financial crisis sent markets tumbling. 'I realised I needed to invest in something more robust and steady,' he says.
Cheng, an associate professor of electronic engineering at City University, joined a credit union set up last August for staff at Hong Kong's nine universities.
Run as people-oriented financial co-operatives, credit unions provide some services offered by banks, primarily lending. But unlike banks, they are owned and controlled by members who usually pay a lower interest rate on loans and earn higher returns on deposits.
Built on the idea of promoting thrift among members and helping them make better financial choices, credit unions are slowly coming into their own during the downturn.
Cheng views the co-operatives not just as an investment tool but as a way to promote core social values.
'It's time to go back to traditional ways. Just look at the mortgage mess created by the banks. It's wrong for them to make profits by compromising the interests of customers,' says Cheng, who is now on the University Credit Union's board of directors.
Henry Mok Man-kwong, an economics professor at the Chinese University, launched the venture in response to interest from colleagues elsewhere in the university's 23-year-old credit union.
