Wed | Apr 24, 2019

CWJCCU introduces revolving credit line for self-employed

Published:Wednesday | June 17, 2015 | 12:00 AM

The board of the Community and Workers of Jamaica Co-operative Credit Union (CWJCCU) Limited approved a $100-million line of credit for micro businesses and the self-employed, primarily targeted at members in the parishes of Clarendon and Westmoreland.

The unsecured revolving credit facility is intended for micro-entrepreneurs who do not qualify for other unsecured loan schemes, which are typically repaid through salary deductions, says general manager Barrington Whyte.

Kingston-based CWJCCU merged with the Clarendon and Westmoreland credit unions in 2011 and 2013, respectively, opening up the cooperative to a different and more rural clientele.

"We have more entrepreneurial members in the parish credit unions," Whyte said, whereas the Kingston branch caters mainly to members who are employed.

Under the new credit line: "We will lend up to $100,000 to individuals whose affairs are in proper order," said Whyte.

"These include taxi drivers who need to do repairs to their cars. There are a lot of those in the transport business," he said.

The new facility builds on a $10 million small farmers' revolving loan programme previously offered by the Clarendon cooperative in Kellits.

"The programme was extremely successful with zero levels of arrears that the credit union decided to extend it to other areas and to increase the amount to $100 million.

24 per cent per year rate

The base lending rate for the new line is 24 per cent per year, plus a risk premium of four per cent. The maximum loan term is 24 months. Repayment is on a weekly basis.

Borrowers also pay a processing fee of two per cent of the loan amount plus GCT, as well as a credit check fee.

The revolving loan is available to persons CWJCCU membership in excess of six months and are farmers, fish vendors, taxi operators, small-business operators or otherwise self-employed, and must have lived in Clarendon or Westmoreland for at least five years.

"He/she should be an active member of the credit union, with a history of savings," Whyte said. Otherwise, applicants are expected to have a "goal-related savings product for at least the duration of the loan".

CWJCCU is one of the largest of some 37 credit unions, with assets of $8 billion and a membership base of 69,076 up to May 2015.

CWJCCU is the largest credit union in a market of about 37, with more than $8 billion of assets and a membership base of just under 72,100, having executed yet another merger with ICD & Associates Co-operative Credit Union on June 1. The new merger added 3,000 members and $230 million of assets, said Whyte.