In a matter of a few weeks the Guyana Public Service Cooperative Credit Union will celebrate the 48th anniversary of its establishment. The Board of Directors and management of the country’s single largest credit union believes that the United Nations-designated International Year of Cooperatives has found the institution in a condition of achievement that allows it to stand out as a symbol of distinction in the sector, which, over the years, has had its own fair share of peaks and troughs.
Asked to summarize its achievements over the years, General Manager of five years, Trevor Benn says briefly and poignantly: “What the credit union has done is to act as a buffer to subsidize the salary levels in the public service.” It is a true if, perhaps, unexpectedly clinical assessment of the role being played by the GPSU Co-operative Credit Union.
The lending levels as much as the views expressed by a few of the credit union’s 13,000 active members attest to the correctness of Benn’s assessment. The credit union’s current lending levels exceed $100 million per month and the numbers are growing. Those members to whom Stabroek Business have spoken also readily concede that the institution is a godsend, a point of rescue in times of crisis.
Conventional wisdom holds that the role of the credit union is to foster thrift among its members and to play a role in community development and regeneration. But the credit union in Guyana is confronted with a far more challenging role. The experience of the GPSU Credit Union, Benn says, suggests that credit unions in Guyana play a role that is much more integral to the day-to-day existence of their members. “What we have found is that it serves literally as a salary subsidy. People approach the credit union for loans to defray recurring expenses like utility bills and other such payments.”
Time was when credit union savings were usually put to far more significant pursuits, like expenses associated with newly married couples setting up their first homes. These days it has become a haven for dire emergencies like unforeseen medical expenses and “catching up” with outstanding hire purchase and school fees payments.
“A lot has changed in terms of people’s circumstances and the credit union has to adapt to the needs of its members,” Benn says.
Chairman of the GPSU Credit Union’s Board of Directors Edward Johnson concurs with the institution’s general manager, though he insists that if the credit union is to grow, to continue to remain in a state that enables it to respond to its current challenges, it must seek to consolidate its own financial soundness. Johnson wants members to know that this too is one of the credit union’s pursuits. Shrewd planning has enabled the GPSU Credit Union to venture into its own investment and savings pursuits through the acquisition of shares in local companies including the country’s two beverage giants Banks DIH Ltd and Demerara Distillers Ltd and the establishment of fixed deposit accounts at local commercial banks. That way, liquidity, always a necessity given the demands of its members, is assured.
While the origins of the GPSU Credit Union are located in an initiative taken by the then British Guiana Civil Service Association, the institution is currently run along the lines of a conventional business entity, answerable to a Board of Directors and in no way controlled by the GPSU, the bargaining agent for most of its members. Johnson supports the idea of the credit union’s independence. He believes that effectiveness is a function of autonomy.
The reputation of the GPSU Cooperative Credit Union has been built on the image and stature of a Guyana public service of an earlier time. Back then, Johnson says, public servants at every level became members of the credit union. Some of them, as if, perhaps, stricken by the influence of habit, have retained their membership beyond retirement. And as if to make the point about what he still believes is the stature of the credit union, even in difficult times, the Board Chairman makes the point that numbered among its members are two judges and a magistrate.
The annual report and accounts for the GPSU Cooperative Credit Union covering the period 2005 – 2008 – annual reports are published at four-yearly intervals with the next one due in 2012 – indicates that the institution has been able to continually increase its lending levels without needlessly compromising either its fixed assets or its investments, an indication that its management is on a sound footing. It is, Johnson says, a reflection of the institution’s investment in training for its staff to help foster the efficiency of the organization. “We allow staff to pursue courses of training that are consistent with their jobs and afford them a particle refund on the cost of the training on the condition that after they are successful… they return to us.”
Benn explains that while, in normal circumstances the lending limit is $300,000, access to additional sums can be realized by members who contribute to special savings. “What this means is that holders of special savings can access amounts from those savings without having to go through the procedures associated with conventional loans.”
If Benn remains cognizant of his role as the Chief Executive Officer of what is in fact a business entity he remains mindful of the particular circumstances of the credit union. “We have to face the reality of the changing face of the credit union and the changing demands of its members. Sometimes we are faced with difficult circumstances and we have to address those circumstances too. If our operations are run along business lines it is true that some of what we do is influenced by welfare considerations.”
Board Member Kenneth Watson, a long-standing official of the credit union is a firm advocate of a credit union with a conscience. “We have to remain in step with the concerns of our members,” he says.
Johnson, whose 12-member Committee of Management includes three members of the Guyana Public Service Union, believes the credit union’s contribution to the education of the children of its members is an important feather in its cap. It offers one-off bursaries to such children based on applications which are evaluated internally.
Having realized a commendable measure of consolidation in recent years the GPSU Cooperative Credit Union is currently considering the establishment of a social fund through which applicants, based on an evaluation of their circumstances, can secure grants to help defray expenses associated with disaster circumstances including fires. “It’s something we are looking at,” Benn says. Frankly, what we have discovered is that some members are even unable to afford borrowing,” he added.
The credit union’s efforts to expand the range of its services to its members also include discourses with the Ministry of Housing regarding the possible allocation of house lots for its members. “If that happens we will be looking at how we can support members in the construction [of their own homes].”
