The President of the Economic Society of Barbados is recommending the establishment of a mega credit union in the island, as an alternative to a cooperative commercial bank.
Addressing the Barbados Teachers Cooperative Credit Union’s annual general meeting at Hilton Resort at the weekend, Ryan Straughn said notwithstanding the prestige and pride associated with having one’s own credit union, it was entirely possible that the formation of a mega credit union, could achieve much more than the formation of a commercial bank.
“The cost structure of this entity would be significantly reduced as administration and shared IT services would enable more resources to be better utilised,” Straughn added.
“Any consideration for the establishment of a cooperative-owned commercial bank must in my most humble opinion, include expansion across its entire Caribbean, where cooperatives exist.”
Straughn said that failure to do such would be to repeat the same “myopic” behaviour of some of the “famous” local conglomerates who turned out to be “sitting ducks” waiting to be “picked off”.
The economist argued that there was significant strength among the collective of credit unions across the Caribbean that should not be underestimated nor undervalued.
“The commercial banks are indeed well aware of the cooperative threat and will be prepared to use all their resources across the region to defend their respective positions,” added the economic society head.
“The question therefore for cooperatives in the Caribbean, will be whether they stand together and take what is theirs or be dictated to by foreign entities?”
However, he said there were some issues the credit union movement had to consider if it decided to go ahead with a bank.
“There is absolutely no place for nationalist sentiment nor misguided patriotism in the decision-making process as to whether you form a commercial bank,” he suggested.
“The decision to establish or buy a commercial bank must be in the interest of the collective membership of the credit union movement as it relates to the business case.” (EJ)