Members of Government and the opposition, members of the clergy, Ms. Kaylesa Simmons, Chairman of The Board and other Board Members including my brother “Rickey”, Ms. Pauline Burrows, General Manager, Ms. Kimberly Russell, Operations Supervisor, Ms. Samantha Wilchcombe, Accounts Officers and other members of the Grand Bahama Cooperative Credit Union’s (GBCCU) Executive and Management team, other distinguish guest, ladies and gentlemen good morning.
Today I bring greetings and well wishes from the Board of the Grand Bahama Chamber of Commerce, on the occasion of the GBCCU’s thirty-fifth (35) anniversary and Expo. My research suggest that since its founding on September 17, 1980, the GBCCU has grown from strength to strength and today has the distinction of being the sixth largest credit union in the Commonwealth of The Bahamas. At the time of its founding in 1980, the GBCCU comprised no more than ten (10) members and I am told that its total assets were less than $25,000. Fast forward to the year 2015, I am advised that the GBCCU’s membership is quickly approaching 2,600 and its total assets approximates $15 million.
This steady growth in membership and assets respectively over the past thirty-five years, was made possible by the GBCCU earning the confidence of ordinary people within the local community who sought to establish savings plans, and through the execution of a sound, conservative investment strategy, all done within a culture of “People helping People to help themselves.”
The GBCCU is a member of the Bahamas Co-operative League (BCL) an apex body, which comprises some eight (8) to nine (9) credit unions operating throughout The Bahamas. Collectively, the credit unions falling under the BCL have approximately 40,000 members and their assets aggregate close to $350 million. According to Governor of the Central Bank of The Bahamas, Wendy Craigg, over the five year period from January 2010 to December 31, 2014, credit unions in The Bahamas enjoyed an average annual growth rate of approximately 7%, thus outstripping the performance of most commercial banks in The Bahamas. These statistics clearly support the fact that the credit union movement in The Bahamas, is fast becoming a significant player in the financial services space.
Up to May 31, 2015, credit unions throughout The Bahamas were supervised and regulated by the Department of Cooperative Development, in the Ministry of Agriculture, Marine Resources and Local Government. Effective June 1, of this year with the coming into force of The Bahamas Co-operative Credit Union Act, 2015, credit unions in The Bahamas are now supervised and regulated by the Central Bank of The Bahamas.
The change in regulators from the Department of Cooperatives to The Central Bank, was made inter alia to comply with international best practice as promulgated by the World Council of Credit Unions and the Caribbean Financial Action Task Force. These international bodies, require that credit unions are regulated and supervised by the entity which is primarily responsible for the stability of a Country’s financial sector, which in our case, in The Bahamas is The Central Bank. The products and services offered by most credit unions in The Bahamas have, over time, evolved in complexity and in many respects are comparable to the products and services offered by commercial banks; hence credit unions are in substance “financial institutions” and are now, due to the aforementioned legislative changes, subject to the provisions and obligations of the Financial Transactions Reporting Act. In essence, credit unions are not only required to know their customers, but must have effective and robust internal controls in place, to identify the sources of its customers’ funds in order to mitigate the possibility of money laundering.
Notwithstanding the similarities of credit unions’ products and services to those offered by commercial banks, credits unions are different from commercial banks in that they are not for profit financial co-operatives that are owned by the members. The basic financial model utilized by credit unions, is the pooling of its members’ savings deposits and shares to finance loans which their members may require at a later date. Members generally benefit from above market rates on their saving’s deposits and below market rates on loans. Most credit unions are governed by volunteer Boards who are elected by the members.
Like any other business, credit unions and their leadership teams also have their share of challenges. These challenges include i) revenue growth – how do you grow interest income and service fees without making its burdensome or onerous for the credit union’s customers, ii) member retention – how do you compete for tech savvy millennials aka “Generation Y” with other financial institutions which have dedicated digital channels to facilitate mobile and automated banking; and iii) regulatory compliance – how do you ensure that you have the right resources and internal controls in place to comply with the mandatory KYC requirements for financial institutions as well as meet the reporting requirements of the regulator. In my view, these and other challenges are likely over time to cause consolidation within the sector, that is smaller credit unions will be forced to link up or consolidate with larger credit unions in order to minimize costs and remain competitive.
Given the phenomenal strides made by the GBCCU over the last thirty-five years, I am confident that this organization is well positioned to overcome the aforementioned challenges and continue on a steady growth trajectory over the next thirty-five years. Once again congratulations to the management, staff and members of the GBCCU and Happy Birthday!
Thank You!
Presentation made by – Kevin D. Seymour, President of Grand Bahama Chamber of Commerce on Saturday September 19, 2015.