A longstanding member of the credit union movement is encouraging the more than 190,000 credit union members to vote for the Democratic Labour Party (DLP) in next week’s general election, after the party promised to introduce a suite of relief measures aimed at the credit movement.
In its manifesto released last night, the DLP pledged that should it emerge victorious in the May 24 poll, it will remove the asset tax on cooperatives which it introduced in 2014; re-introduce the income tax deduction for credit union shares and deposits; provide insurance on deposits at cooperatives; and support the establishment of a credit union owned and operated commercial bank.
It also promised to reform the various Central Bank guarantee schemes to include the credit union cooperatives in facilitating small and medium sized enterprise (SME) financing; seek international partnerships for the establishment of a venture capital financing for SMEs through the credit union movement; and incentivize the credit union movement to develop crowdfunding platforms, mobile banking and other financial technology solutions aimed at SMEs.
Ashton Turney, the former president of the Barbados Co-operative and Credit Union League Ltd told Barbados TODAY he fully supported the proposed measures, which he said would help to increase membership.
“I am saying based on this as a former president of my credit union and also the League, I am of the view that the membership of the movement should vote for the DLP so that they can benefit from these measures,” Turney said.
“My view is that these moves will really assist the movement. I am not saying there may not be need for more changes in the future, but at this time they will be very helpful to the movement . . . They should vote for the DLP,” he insisted.
The former Barbados Workers Union Cooperative Credit Union president singled out the pledge to provide protection for credit union deposits, arguing that a number of professionals were refusing to join the movement because there was no such system in place.
Over the years Government has been promising – but has yet to deliver – a deposit insurance fund for the credit union movement – similar to that which commercial banks currently enjoy – which protects every account holder up to $25,000, should the bank fail.
“Any reintroduction of the income tax allowances [and] the provisions for insurance on deposits will cause the credit union movement to grow . . . .You have people who have not joined a credit union because their funds are not secure,” Turney said.
The credit unionist, who is also a past president of the Caribbean Confederation of Credit Unions, said if it were up to him the insurance on deposit would be the first measure to be implemented, followed by the restoration of income tax deduction.
Pointing out that credit unions were offering more than the virtual zero per cent interest on deposits currently being offered by commercial banks, Turney said he was pleased with the performance of the credit union movement at this time.
“The banks are even charging to have almost everything. This is not happening in the credit union. We are more user-friendly in terms of getting loans. We have a more listening ear to members,” he said, adding that the DLP should also consider the establishment of a special fund to help credit union members secure mortgages.
“That is an area that members come for assistance. As you know the credit union cannot lend out more than it has. So we would like a facility whereby we can assist the membership with those funds. That is maybe the only thing I can see could be added . . . where credit unions could get funding to assist their membership,” he said.
It was in the 2014/2015 Budget that Government introduced a 0.2 per cent tax on the assets of financial institutions, including credit unions. In 2016, Minister of Finance Chris Sinckler announced the tax would rise to 0.35 per cent in an effort to raise $14.3 million in revenue.