Closing the gap: Time for equal protection for credit union members

As Barbados prepares to loosen the reins of IMF oversight, the government must now look inward — to the local financial market — to sustain its borrowing needs. This shift marks a critical juncture in the country’s economic journey, one that demands both confidence and caution.

While the island’s credit rating is gradually climbing, Barbados remains below the threshold of investment-grade status. As a result, international borrowing continues to carry a steep price — not just in interest rates, but in the hard currency required for repayment. Foreign debt means parting with precious US dollars, a cost the country can ill afford as it seeks to consolidate recovery and growth.

As a small, open economy navigating a volatile trade and geopolitical landscape — one where countries with limited economic or strategic value are often overlooked by larger, industrialised nations — Barbados must prioritise the strength and resilience of its local financial sector.

Prime Minister Mia Mottley has already turned her attention to the local credit union sector, seeking to have it play a more assertive role in mobilising the more than $2 billion in assets and deposits towards national development.

One of the boldest moves to engage member-owned financial institutions came with the controversial partnership between the Barbados Agricultural Management Company (BAMC) and the Barbados Sustainable Energy Co-operative Society Limited (CoopEnergy). This merger saw the cooperative assume control of the sugar industry — a critical move driven by the government’s divestment strategy in line with its IMF commitments.

Under the leadership of President Lieutenant Colonel Trevor Browne, CoopEnergy was expected to have secured approximately $16 million for a 55 per cent controlling stake in the venture. The credit union consortium was to oversee the production and sale of sugar, while workers in the industry were to be given the opportunity to become shareholders in the project. This partnership was intended to mark the beginning of a transition for the sugar industry — not just towards greater local ownership, but also towards a future rooted in sustainable energy production.

But alas, the CoopEnergy-BAMC partnership appears to have been short-lived, its potential never fully realised. The envisioned union, which promised to place control of the sugar industry in the hands of working-class Barbadians, now seems to have unravelled before it could truly take root.

Many had hoped this venture would mark a significant shift — allowing a collective of credit union members, representing the island’s working class, to take the reins of an industry long plagued by a history of plantocracy and exploitation.

While the failed union between BAMC and CoopEnergy remains noteworthy, our concern lies less with that missed opportunity and more with the prolonged wait that credit union members have endured to be protected by deposit insurance. For over a decade, these members have been advocating for their savings to be safeguarded under the national Deposit Insurance Scheme, managed by the Barbados Deposit Insurance Corporation (BDIC).

Credit unions have consistently voiced their frustration over the glaring disparity between the protections afforded to customers of commercial banks and the absence of such a safety net for those who arguably need it the most.

This inequity not only undermines confidence in the financial system, but also perpetuates a sense of injustice among the very people who are the backbone of Barbados’ cooperative financial sector.

While the current administration deserves commendation for its proactive stance on the issue of deposit insurance, for the hundreds of thousands of credit union members, this protection cannot come soon enough.

As the government pushes for greater domestic-centred borrowing, it must ensure that the credit union sector — which it hopes to rely on for future investment projects — is adequately safeguarded by deposit insurance. Credit unions stand as one of the most compelling examples of successful cooperation among predominantly Black, working-class Barbadians, who have worked to enfranchise themselves in ways other groups have historically done.

We are firmly convinced that credit unions have more than proven their worth and now deserve a nationally supported scheme that provides a safety net on par with, or at the very least comparable to, the protections offered to foreign-owned financial institutions.