Regionally, credit unions look out for customers

The covid19 crisis has affected economies worldwide, leaving people without work in many cases due to stay-at-home measures, lockdowns and other measures to curb the spread of the novel coronavirus. Credit unions in the Caribbean have put several responses in place to cater to the needs of their members.

During a webinar hosted by the Cipriani College of Labour and Co-operative Studies, heads of various credit union organisations outlined the operational responses that they and and their members had put in place. Many of them were the same, including finding ways for their workers to telecommute, determining how annual general meetings (AGMs) would take place, as this was when dividends were paid out, and lobbying governments to make sure that credit unions were seen as essential services.

Caribbean Confederation of Credit Union general manager Denise Garfield said the 19-member affiliate organisation had begun looking at measures including co-operative social responsibility, communicating with various stakeholders and developing resources for their member organisations and members. They developed a pandemic checklist for the credit unions, protocols for fulfilling the checklist and developed a telecommuting policy.

She said they had looked at protecting credit union assets and provided guidelines for preventing runs on the credit unions, especially now that many people had lost their jobs. The confederation had also donated funds to the Pan-American Health Organisation and other regional organisations fighting covid19. It was also communicating regularly with all its affiliates for impact reports.

Garfield said the confederation was in constant communication with regulators, which had led to regulatory flexibility with standards and statutory flexibility with respect to dividend payments and AGMs.

Looking towards a post-covid19 environment, the confederation is exploring business continuity growth opportunities, shared back-office operations services, digitisation, agricultural lending through co-operatives and local/regional tourism.

TT’s Co-operative Credit Union League was applauded for having signed an agreement with its government for a $100 million covid19 emergency loan, which would benefit credit union members and small business owners, in that credit unions who have signed on to the programme can offer loans to those members at 50 per cent of their monthly salary up to a maximum of $5,000 at an interest rate of half of one per cent, which will work out roughly on the declining balance to three per cent. Once a member has regained their job, they will begin repaying the loan over a 24-month period.

Chief operating officer Dianne Joseph said the league had shared information with members on how to protect themselves and implemented public health measures to ensure the safety of staff and members. Other measures they had implemented were debt consolidation, reduced interest rates, financial counselling, waivers, moratoria on loans and increased support for the elderly.

In Barbados, general manager of the Barbados Co-operative and Credit Union League Anthony Pilgrim said the credit unions had focused on implementing the recommended public health measures to protect members and employees and digital solutions to provide speed and convenience for members. He said other responses were moratoria on loan repayments and waiver on loans and certificates of deposits. He said if the situation continued for longer than six months, loans may have to be restructured due to members’ circumstances. He said the league would also be looking at increased funding for the micro, small and medium-enterprise (MSME) sectors, including upskilling lending personnel, providing technical support, and collaboration with central banks.

Jamaica’s Co-operative Credit Union League had focused on credit union liquidity and probability, members’ need for cash, easing of loan repayments and new loan offerings. Group CEO Robin Levy said working remotely had been implemented for 50 to 75 per cent of staff, with daily hygiene rituals, weekly deep cleans, and enhanced entrance protocols in place for those who had to be in office.

He said member initiatives included relaxed liquid asset requirement, league liquidity loan fund for credit unions, and the offer of a three-month moratorium on principal repayment on a case by case basis. The league had reached out to its most vulnerable measures with food packages and information on the health guidelines. It was also assisting with grant and loan funding for agriculture, community tourism and the MSME sectors. He said it was also looking at business continuity and lobbying the government for credit unions to be part of future stimulus efforts.