Wong address seriously flawed – CCCU

by Peter Marshall 12.JUL.11

The general manager of the Caribbean Confederation of Credit Unions (CCCU) Ralph Wharton has come out in defence of this region’s credit unions, following a less than glowing address delivered by Dr. Yu Ching Wong, a representative of the International Monetary fund (IMF).{{more}}

As reported in the June 30, 2011 edition of the Trinidad Guardian, Wong, in her address at the Fourth Biennial International conference on Business Banking and Finance, held in Trinidad and Tobago, voiced concerns for the region’s credit unions, especially following the failure of CLICO and the international economic downturn.

She stated that there was a general decline in the membership of credit unions within the Eastern Caribbean Currency Union over the past five years, while globally there has been an increase in credit union membership. She drew reference to “the three biggest credit unions in the ECCU”, the Roseau Credit Union in Dominica, General Employees Co-operative Credit Union in St. Vincent and the Grenadines and Choiseul in St Lucia, which have “struggled to keep membership”. She asserted that this decline directly relates to the global financial and economic decline and as such Caribbean countries should establish regulatory frameworks and implement international standards to ensure that this domino effect does not occur.

Wharton, however, has refuted these claims and in a letter to the editor of the Trinidad Guardian dated July 6, he describes Wong’s statements and observations as being “seriously flawed and damaging to the Sector in the sub-region and the Caribbean as a whole.”

In his letter, which was copied to the IMF, Wharton asserts that contrary to Wong’s address, the Credit Unions of the ECCU have actually seen an increase in membership. This is reported as being a 3 per cent increase between 2008 and 2009 and a 6 per cent increase between 2009 and 2010.

Specifically, of the three biggest Credit Unions which were purported to have been struggling, two saw an increase in membership according to Wharton’s figures. The General Employees Cooperative Credit Union in St. Vincent and the Grenadines recorded growths of 7 per cent from 2008 to 2009 and 5 per cent from 2009 to 2010; and Roseau’s membership grew by approximately

4 per cent between 2008 and 2009, before amalgamating with four others in 2010, to become the National Credit Union.

Choiseul Credit Union, he adds, which Wong claimed to be one of the biggest in the region, actually holds the rank of 6th largest in St. Lucia.

Against this significantly brighter picture of the state of the Eastern Caribbean’s Credit Unions, the general manager sums up his response by stressing that they have always been functioning under Government Regulatory agencies and have always utilized methods such as the PEARLS rating and monitoring system that the IMF representative, Chin Wong, suggested that they use.