Navigating the economic fallout of COVID-19: A study of credit unions financial ratios in Ecuador

Abstract

This research aims to identify the performance of Credit Unions in Ecuador during the COVID-19 pandemic. Based on the information reported by the National Financial Regulator for Credit Unions , a CAMEL model is used to assess their financial performance. An analysis of Credit Unions was analysed spanning the years 2019 (before the pandemic), 2020, 2021, (during the pandemic) and extending through 2022 (after the pandemic). In all cases, the adverse consequences experienced during the most severe periods of the pandemic, particularly in 2020, were contained. This was mainly achieved by the implementation of forced credit rescheduling, which effectively curtailed the escalation of past due credit indicators. Credit Unions demonstrate operational and structural strengths over traditional banks, particularly in their capability to effectively engage with the Popular and Solidarity Economy. Although there are numerous studies that identify the impact that the COVID 19 pandemic has had on Credit Unions and the strategies that were implemented to combat this impact, but there is a lack of specialised studies that clearly determine the situation of financial ratios in Credit Unions during the pandemic, particularly in the context Ecuador. This research aims to address this information gap.