Credit Union League feeling COVID-19 pain

WESTERN BUREAU:

WITH THE COVID-19 pandemic still raging and creating havoc in the various sectors, the financial sector is already counting its losses with the Jamaica Co-operative Credit Union League (JCCUL) saying its solid asset base of over $140 billion is now being impacted by delinquency, as customers struggle to combat the tough times.

According to Robin Levy, the group chief executive officer (JCCUL), all the credit unions under the umbrella group, which he leads, have been feeling the strain brought on by the global pandemic, which has caused major dislocation in workplaces all over the world.

“The 25 credit unions, with an asset base of $140 billion, have not been spared. For the year 2021, there is an average 7.9 per cent increase in delinquency,” said Levy.

According to Levy, the impact of the pandemic has hit some credit unions harder than others, which is primarily a function of the level of delinquency being faced at different places.

“Those with closed bonds have done better than those with open bonds. By that I mean credit unions whose memberships are within a specific professional group, example, the Jamaica Teachers’ Association and the Police Federation are closed, as they only have members from within their group,” said Levy. “Others, like Trelawny Credit Union, are open, with their membership drawn from the wider community.

“The open one will have a higher delinquency rate. They have many members linked to tourism and restaurants. Those industries suffered during the early days of COVID-19, and some restaurants have even closed for good,” added Levy.

In a bid to cushion the blow on their membership, some credit unions have been working closely with their members by offering them a moratorium, among other support.

The Trelawny Credit Union recently held a special meeting to discuss delinquency, as it tries to find creative ways to function in what has become an unpredictable environment.

“We will be launching a loan repayment-collection campaign, which will target loans over 365 days in arrears. Special payment plans will be arranged, especially for members affected by COVID-19 in relation to their employment,” said Julia Lindsay, the marketing officer at the Trelawny Credit Union.

Lindsay further said an essay competition will be organised among the schools in Trelawny to get students to look at the importance of the credit union and give their views on how to make them viable.

“The students will write on the topic, ‘Why is it necessary to repay your credit union loan?’ said Lindsay, who noted that the winners will also receive cash prizes. “They will also be encouraged to become members of our Student Savings Plan.”