Barbadians continue to show great confidence in the local credit union movement, with more of them moving their savings and deposits to these non-bank financial institutions.
This was among the disclosures at the recent annual general meeting of the Barbados Co-operative & Credit Union League Ltd. (BCCUL) at the Lloyd Erskine Sandiford Centre in Two Mile Hill, St Michael.
Long-serving credit unionist Hally Haynes, who was returned as League president for the 2020/2021 financial year, told attendees that “preliminary data suggested the continued migration of deposits from the commercial banking sector to the credit union sector”, though not at the same rate as the previous year.
However, he noted, limited investment opportunities and marginal loan portfolio growth meant that credit unions found it necessary to reduce interest rates on their deposit instruments.
During the 2019/2020 financial year ending July 31, 2020, the movement recorded growth in several segments, as membership in credit unions grew by 3.5 per cent, with an additional 7 514 new members. That increased the movement’s total membership to 218 579.
Haynes also reported that total savings of affiliate societies recorded year-on-year growth of 7.85 per cent, moving from $2.21 billion in 2019 to $2.38 billion this year. This was below the growth rate of 9.28 per cent that the credit unions enjoyed the previous year.
Haynes, who is director of the Barbados Youth Advance Corps and president of the Barbados Police Co-operative Credit Union Ltd, also commented on the impact of the COVID-19 pandemic on Barbados’ economy as a whole, the financial sector, and credit unions specifically.
“COVID-19 weakened the country’s economic fundamentals even further and this created hardship in the form of high levels of unemployment. However, I am pleased with the response of credit unions. They lived up to their mandate to put members first and responded by offering solutions such as loan moratoria and the waiver of penalties, among other initiatives,” he said.
“These measures were all taken to ease the burden on members even though they are expected to marginally impact the bottom line in fiscal year 2019/2020 and materially in fiscal year 2020/2021.”
In an important development that is expected to be replicated in the coming year, the BCCUL president reported that the St Barnabas Credit Union had its assets and liabilities transferred to One Heritage Credit Union.
That transfer was approved by the regulator, the Financial Services Commission, and Haynes said further consolidation and strengthening of smaller credit unions was likely to continue.
According to him: “The local credit union sector has been resilient throughout this period of difficulty brought on by the COVID-19 pandemic. Despite the challenges, credit unions and the League remain committed to participation in the automated clearing house (ACH). During the reporting period, the BCCUL facilitated access to credit bureau services. Further, the BCCUL is committed to the provision of deposit insurance for credit unions, greater advocacy at the Social Partnership, and ensuring the smooth transition to new debit cards and other digital products and services.”
The BCCUL annual general meeting was attended by delegates and alternates from the island’s 30 credit unions.
Following an election process, a new Board of Directors of the BCCUL came to office, led by Haynes as president. First vice-president is Sherwin Greenidge, second vice-president is Patrick McDonald, Susan Fitt is secretary, while Glendon Belle is assistant secretary and Noel Nurse is treasurer. Adlai Stevenson is assistant treasurer, while Kevin Lashley and Kelvin Whittaker are board members.