Christopher Samuda (right), president of the Jamaica Cooperative Credit Union League (JCCUL), in conversation with Glenworth Francis, JCCUL general manager, during a press conference at the Knutsford Court Hotel in St. Andrew on Friday. - Rudolph Brown/Chief Photographer

The new $20 million capital requirement that regulators plan to impose on new credit unions continues to irk the movement, which Friday intensified its lobby with a press conference as the expected year end tabling of the bill approaches.

Quoting from the last International Monetary Fund report on Jamaica warning that the new strictures should not disrupt the extensive outreach of small savers and borrowers, chief spokesman for the credit unions, Christopher Samuda, said the proposed rules would hurt their market and growth prospects.

Legislation for regulation is being drafted by the finance ministry to move the credit unions from self-regulation to monitoring by the central bank.

The movement has already agreed on a planned doubling of the limit on unsecured loans from five per cent of their portfolios to 10 per cent in the move to greater fiscal prudence.

'There for Jamaicans'

"We are clear as to our place in the lives and economies of Jamaicans," said Samuda, president of the Jamaica Cooperative Credit Union League (JCCUL). "We are there with Jamaicans when they are saving towards their important goals or just when they just need that safe harbour to put their funds as they seek to grow. We are there when Jamaicans want to make a significant step in life and realise their personal goals."

Growth trend

The island's credit unions, which are 850,000 strong in membership, projects growth of six per cent per annum going forward. They represent some 10 per cent of personal savings and supply over 20 per cent of personal loans.

The credit unions, he said, have been "consistently outpacing" growth in the general economy.

Deposits are projected to grow at more than 13 per cent per annum and loans at 12 per cent.

"Indeed, credit unions will continue to grow," he said. "It is our duty to protect this growth trend and that is why we lobbied for and secured a doubling of loan limits for unsecured credit."

Stagnation fears

However, the movement sees the capital requirements as "inimical to the credit union philosophy of people coming together to help each other."

No such limit currently exists, and the JCCUL fears it will have a stagnating effect by deterring new credit unions from being formed.

"We feel strongly that there can be room for accommodation on this issue," said Samuda.

"It must be about accommodation and striving to understand and preserve the uniqueness of a movement that remains the envy of many."

business@gleanerjm.com