1,000 public workers credit union members get a break

More than 1,000 borrowers have been granted relief from their loans and mortgages during the three-month Coronavirus lockdown, the country’s largest public-sector credit union has reported.

And, as its members continue to navigate severe financial difficulties, the Barbados Public Workers’ Cooperative Credit Union Limited’s Vice President Cedric Murrell has promised that extensions to the moratoria will continue to be granted on a case-by-case basis.

“Our moratorium programme would have been in place from about April, and quite a few of our members have availed themselves of it. Over 1,000 of our members have availed themselves for either one month or three months. Three months have now elapsed, and we are evaluating it as we speak,” Murrell told Barbados TODAY.

According to the vice president, the relief was granted mostly to customers who either owned their own businesses or are employed in those industries most hard hit by the pandemic, including tourism and other services.

“As [those industries] pick up, we expect that those members will be able to more keep pace with their loans. But as I said, we are now seeking to compile and assess that information, and it will be made available,” he explained.

Numerous financial institutions including commercial banks have allowed customers to postpone their payments for as many as six months after dozens were laid off amid government-imposed shutdowns to stop the spread of COVID-19.

Like other lending agencies, this decision has bitten into the credit union’s profits, but according to Murrell, the falloff has not been so significant as to cause alarm.

While the BPWCCUL has not committed to full-scale extensions on the moratorium programme, he promised it would continue to be lenient.

Murrell said: “I know that other sectors of the financial industry would have extended for as much as six months, so while we haven’t done so in the first instance, we are indeed considering other requests that have been made beyond that six months.

“We are now seeing and evaluating the impact that it has had on the institution and on our members. That evaluation is ongoing, but let me say to you that we have been very happy to provide that relief to our members, and they have expressed their gratitude that the organisation has been able to do it. Of course, that affects our cash flow, but at the same time, it has not been so significant that we cannot continue to grant moratoria where merited.”

The credit union’s management has been able to control delinquency levels over the years but Murrell pointed to a gradual rise in bad loans over the last six years. He insisted the uptick is not considered to be out of the ordinary and said the credit union is bracing for a stronger increase given the current climate.

He confirmed that the unpredictable financial environment has resulted in a significant falloff in demand for credit.   

“We have seen a diminution on loans, and that’s because people are unsure. As the economy picks up, we are very confident that that will pick back up, because economic activity drives that. Thankfully, we have not see a significant dent in our deposits either, and that is a healthy indicator,” the VP added. kareemsmith@barbadostoday.bb