An economist has called for credit unions and the local postal service to join forces to create a “post bank”.
Ryan Straughn, a former president of the Barbados Economic Society, made the bold proposal as he delivered the Eighth Tom Adams Memorial Lecture at the Barbados Workers’ Union Hugh Springer Auditorium, Harmony Hall, St Michael on Tuesday.
The Postal Service possessed the network and infrastructure, while credit unions had a large membership base and more than $2 billion in assets that could be used in more ways, he advanced.
Straughn who is the Barbados Labour Party’s (BLP) candidate in Christ Church East Central, said the ideas represented necessary changes required for the changing times.
Speaking on the theme, Transforming Barbados’ Economy in an Increasingly Uncertain World: Lessons from Tom Adams for the 21st Century, Straughn said the island’s 33 credit unions with 188 227 members hold $2.076 billion in savings and should join forces with the postal service to “form a new financial institution” that could offer a broader range of financial services than currently exists.
The financial consultant and former economic modeler with the Central Bank called for an “unleash of the might of the credit union movement”.
And with increasing calls for the reintroduction of a development bank and for credit unions to form their own bank, Straughn insisted now was the time for the creation of a ‘post bank’.
“The assets currently held by the Post Office could be better utilized to deliver a broader range of services to citizens outside the current offering by the commercial banks,” he suggested.
“This deployment of much needed capital will partly finance the economic recovery effort that Barbados needs,” he said.
In this concept of the ‘post bank’ Straughn envisioned postal workers with upgraded skills working with credit unions to revolutionize “the financial landscape not only with its product offering but its ownership structure would be completely Barbadian”.
Recently, Postmaster General Margaret Ashby, said the institution which has been serving the island since 1852, was “being forced to compete in an unregulated market”.
She added: “The Post Office continues to struggle to maintain its universal service obligations with no similar contribution from other players within the market”.
Straughn suggested the ‘post bank’ concept would cater to traditional practices of working-class Barbadians such as meeting turns.
“I would like to see the reintroduction of the meeting turn which women have traditionally used to finance household operations.”
Straughn said a more formalised meeting turn would carry “a few enhancements”.
“Instead of the usual lump sum payment at every ‘turn’, we can deliver retail investment if the post bank organised digital meeting turns so that any Barbadian can buy in,” the economist suggested.
He proposed that when a person’s ‘turn’ came, their payment could be redirected into any financial instrument of their choice.
“We must make it easy for Barbadians to do business in this country . . . [and] invest without compromising their rights as shareholders or small investors.
“The pooling of funds in this manner can be directed to start-up companies, stocks, bonds or other securities,” he told the audience, adding that the investments should be easy to liquidate in the event a person needed cash urgently.
With his proposal, Straughn said, “the small man will be at the table”.