The history of credit union is a fascinating one, since the concept of the credit union as it is known today came about due to the powerful political, economic, and social changes that swept through Europe after the fall of the feudal system, the blossoming of the Renaissance and the advent of the Early Modern Period. Although the first active credit union did not spring up on the American side of the ocean until the early 20th century, the concepts that helped to shape those that formed much earlier in Europe had been developing for centuries. Frequently, credit unions are viewed as providers of microcredits and instrument for expansion of crediting, since the amount of microcredits claimed by small and medium size businesses has grown compared with the previous years. The growth mainly relates to the present economic situation in the world and the necessity to increase and optimise the activity of small businesses to retain their competitiveness. Credit unions represent a significant part of the small-loan market in several EU Member States, but are not meant primarily to production credit. The European Commission has launched an initiative to engage credit unions in expansion of the micro crediting system; hence, Latvia has also elaborated a micro-crediting development programme, where credit unions play the basic role. The research aim is to study and discuss credit unions compared with other financial institutions and their development in Latvia. The discussion begins with a historical background on credit unions, followed by an analysis of the concept and legal regulation of credit unions and it is summarised by the analysis of credit maturity structure of loans disbursed by credit unions in Latvia. The paper concludes that in Latvia, credit unions are established to enhance the availability of financial resources for the local population, to promote regional development, and to facilitate the participation of population in the national economy. Presently, both large and small rural credit unions operate in Latvia and unfortunately the governing Law on Credit Unions does not encourage the establishment and development of rural cooperative credit unions. The research is based on the monographic descriptive method, methods of analysis and synthesis as well as the logical and constructive methods.
