WITH only 29,000 persons being part of the Credit Union Movement in Guyana, it is the belief of the Guyana Co-operative Credit Union League Limited that changes to the rules governing credit unions in the country must be made to facilitate an expansion of the local movement.

In an interview with the Guyana Chronicle on its online programme –Vantage Point, Secretary of the Guyana Co-operative Credit Union League, Donna Todd, and League’s Board Director, Aubrey Crawford, said that the membership of credit unions have remained low because a majority of the country’s credit unions are “closed bond” and not “open bond.”

Cooperatively owned by their members, credit unions are categorised in two groups – open bond and closed bond institutions. Open bond credit unions have open membership while in closed bond credit unions, membership is limited to organisations, companies and groups.
In Guyana, there are only four credit unions that are open bond from a total of 30. Twenty-six of those credit unions are affiliates of the Guyana Co-operative Credit Union League while four are not affiliated.

At the Guyana Public Service Co-operative Credit Union Ltd (GPSCCU), for example, there are three primary requirements, among them; applicants must be employed within the country’s Public Sector. GPSCCU is the country’s largest credit union.

Crawford said unless credit unions in the country change their rules to facilitate persons outside of their organisations, companies and groups, membership will remain low. “In other countries, in the Caribbean and other parts of the world, there are open credit unions where anybody can join once you are a citizen or living in the country, you can join those credit unions,” he pointed out.

Todd, the secretary of the league, noted however, that while the membership of the credit union movement represents only one per cent of the country’s population, its asset base remains high. “Our asset base right now is about US$40M, so while the membership may not be growing significantly our asset base is high,” Todd explained, while adding that the credit unions are in competition with the commercial banks here.

“So when a member of our credit union goes to a bank for a loan, the banks are encouraging them to leave the credit union. So maybe our membership is low, but when you look at the asset base, and when you look at the other actors in the financial sector…you see we are in competition with them,” the league’s secretary said.

In their to quest to access large sums of monies from commercial banks, some members would write their respective credit unions and request that their deductions be suspended for specified periods until their loans have been secured from the banks.

Todd sees the request by the banks for members leave their credit unions in order to access finance as an attempt to suppress the work of credit unions in the country. It was on this note that she too underscored the importance of upgrading the rules governing credit unions here. Amendments to the Co-operative Societies Act, Chapter 88:01 are also needed, she said.

“Most of the credit unions have rules that are outdated; they are not in keeping with best practices around the world, so that has to be changed first…Most credit unions lend three times your savings, if you have $3 you could only get $9, so the rules of the credit have to change. Without that change, then it would have the member and the credit union also at a disadvantage,” Todd explained.

Weighing in further on the issue, Crawford submitted that credit unions and by extension their members can have greater access to finance if they join the League’s Central Finance Facility. “So we are talking about a credit union within a credit union,” he posited while emphasising that through the Central Finance Facility, credit unions would be able to lend their members large sums of monies, ranging in the monies, just as the commercial banks are doing.

“So a $10M would be like nothing because the same system that the bank is using, the credit union movement around the world is using it because they have the central financing system but we in Guyana, our credit unions are not taking part in that. Some of the credit unions are members, but others are not members,” the League’s Board Director said.

Todd also made a pitch for small credit unions to merge, noting that by merging, they would be even more financially empowered. “What we have recognised also in Guyana is that we have a lot small credit unions, some credit unions have approximately 21 members, so we have to think also about merging. When you merge credit unions, your assets become greater, your members will get more money to borrow, you can do a lot more, than if you stand alone,” she explained.

But Todd was the first to admit that many of the small credit unions have put up a resistance to this proposal of merging credit unions. “Whenever you introduce mergers to these small credit unions, they are not buying it, because they feel comfortable, every king, in his own kingdom. They don’t look at the big picture, for example Jamaica and Trinidad and Tobago, Barbados, when you look at the structure of their credit unions, if it wasn’t for mergers, they would not have been going so strong,” she reasoned.

But despite these challenges, Todd and Crawford agreed that though small, the credit union movement in Guyana remains a vibrant force, providing much-needed financial assistance to its members. Todd said since 2015, the government, through the Social Protection Ministry’s Department of Cooperatives, has been working to address the issues facing credit unions in Guyana. According to her, prior to 2015, credit unions were “struggling.”
International Credit Union Day was observed on Thursday, October 17 under the theme “Local Service, Global Reach.”