Hope I find you well. December and January are very busy
for the credit union, hence, my delayed response.
The credit union movement in Jamaica has just gone through
period of adjustment to be accredited as a Credit union under the
Jamaica Cooperative credit Union program. We had to undergo an
extensive period of training for our staff and volunteers.
Under the program credit unions had to make the switch
to Deposit Shares maximum 20% and deposit over 70%. Capital from
surplus to be 8-10%. Delinquency below 5%. Non Earning Asset 5% and
below and Operating expenses below 8% of Average Asset. Due to our
experiences with your training at the Institute we were the first to
achieve this shiftmainly
Because we were able to adequately educate our staff
We had to start with the Directors and other committees
the staff and then the members so that we could get them to approve
the relevant rule changes.
A number of credit unions are not making the adjustment
are facing challenges to meet the present economic conditions. Having
made the shift and improving our efficiency has helped us to be more
flexible in a volatile interest rate market. Over the last year we
grew in all the key result areas better then the credit union
industry and above the financial industry.
Value of Shares and Return to member on Shares when
Credit Union. We had used the Fixed Assets to identify the value of
the member's shares in the credit union and as a growing society we
had valued the minimum shares at about 25% more. Members are required
to pay the minimum shares as a non withdrawable shares. Members can
also have other voluntary shares as they desire. We have also
introduced a long term deferred shares - cannot be withdrawn for a
period of three years. Our shares non withdrable shares cannot be
used as security for loans as we treat it as the members' equity in
the business. We are at the stage where we paying the highest return
on shares since it is the members risk capital.
We know that on a members withdrawal from the society they
paid shares + earnings. We are now working on the valuation of the
shares so the member can get the value on withdrawal. We have some
ideas. but your thoughts would help.
Fitz G. Rowe
St. Elizabeth Credit Union