President’s message – Members make it happen

President’s: Message – Credit Union Day 2005

by Reuben John

The advent of the new world order, globalisation and the introduction of a number of new trade regimes will present a number of challenges to Credit Unions.

The question is whether the sector can survive and flourish in an era of globalisation, a market where larger entities will be dominant and are expected to exploit the benefits that are attributed to economies of scale given their large size and access to financial and economic resources. {{more}}In a market where concession, subsidies and preferential treatment will be deregulated over a period of time, can Credit Unions become more efficient and cost effective operations, and provide a wider range of high quality services to their members in a globalised economy?

To answer this and other relevant questions, we must critique all aspects of Credit Unions’ operations including their structure, capabilities, the level of efficiency, profitability and the extent to which they provide a competitive return on investment to members. We must pay specific attention to the following:

* Management and support structures within the organisations.

* The size and composition of the membership, technical competences and cohesiveness of the board of directors.

* The ability of Credit Unions to respond to changes in the operating environment locally, regionally and internationally.

* The ability of Credit Unions to maximize the use of modern technology in the delivery of services, financial products and information to members.

* The human resource capability and the extent to which key personnel are dynamic in their response to changes that can affect the long-term viability of the Credit Unions.

* The ability of the Credit Unions to maximize returns to members.

* The quality, range and price of its services.

In addition to the challenges from globalisation, regional Credit Unions will be affected by the introduction of the of the Caricom Single Market and Economy (CSME) which is scheduled to take effect from January 1, 2006.

Under the new regime Credit Unions will be expected to operate in liberalised financial markets and compete for scarce financial resources. This is likely to pose new challenges to the sector but at the same time it will create more opportunities for growth and expansion than was ever the case in the past.

Credit Unions must therefore prepare themselves to capitalize on the opportunities that will result from the CSME. The initiatives that have been undertaken at OECS Credit Union League and affiliates level must be accelerated and converted from work-in-progress to deliverables as soon as possible. The free movement of personnel, money and information between Credit Unions in the region are key benefits to be taken advantage of immediately.

There is also a need for preparedness in order to deal with the challenges that are likely to confront the sector. The very nature and structure of these organisations are designed to combat such challenges. I am convinced that Credit Unions are very dynamic institutions that adapt readily to changes. History has shown that they emerged from hard economic times when there were global recessions and depressions. They have flourished since then and will continue to do so with the help and support of their resilient, hardworking and committed members.