This paper examines the factors affecting financial exclusion, and proposes the strategies for enhancing the role of credit unions as financing source for small business startups. Credit cooperative institutions have played an important role in assisting people and communities who suffer from social and financial exclusion such as small business owners. But many of them have closed and lost their operational grounds by financial restructuring. Accordingly people with low credit scores have faced with increased financial constraints and the government has proposed various measures to assist them. Credit unions should develop strategies more actively to ease their financial constraints, expand and reinforce the operational grounds through relationship banking, enhance competitiveness by community based specialization strategies and developing models.