The National Union of Credit Unions of Employees in Romania (U.N.C.A.R.S.R.) is the national authorised body responsible for maintaining and developing a safe and reliable system of credit unions of employees – non-bank financial institutions. It also protects the specific interests of credit unions and provides them with organisational, technical, methodological and financial services for fulfilling their statutory duties.

Overview of Good Practice

Over the years, the credit union industry has undergone a significant change, both in terms of the number of credit unions as well as the asset mix of their portfolios. This has brought about both threats and opportunities. The future destiny of this industry depends upon its ability to generate enough income to support growth while maintaining adequate capital in the context of increasingly tighter requirements. CUs and microfinance institutions in general implement multiple mechanisms that overcome the screening and enforcement problems, which reduce the default risk and improve repayment rates. The greatest challenge the microfinance institutions will face globally in pursuance of their role as financial intermediaries is how best to manage their credit and risk exposures in comparison to the rising competition in a more and more sophisticated and turbulent economic and social environment.

In light of these considerations, Iulia Pasa Director of Supervisory Division of UNCARSR, designed and developed a tailored tool for risk management adapted to the challenges of CUs.