In the past year, a number of credit unions (CUs) have closed … nine requiring the Financial Services Compensation Scheme to return deposits to members … raising concerns about the capability and the future of these financial institutions and Trinidad banking as a whole.
Like all other deposit taking institutions, banks included, credit unions in trinidad and tobago are closely regulated by financial authorities. In Trinidad and Tobago there are about 130 credit unions today, which is down from around 400 credit unions in the late 1980s. Trinidad banking done in credit unions is facilitated by highly experienced staff all the way down to volunteers. Since so many credit unions have already closed, the real question is, can credit unions still existing provide affordable, quality financial services in a sustainable way, or are they all destined to close or be bought out.
Credit Unions work by offering accounts and helping people or businesses find financial security and well being. They promote the concepts of fiscal responsibility and thrift. Customers receive Trinidad loans and Trinidad mortgages at affordable interest rates and credit unions that are also fiscally responsible and keep proper loan books should operate at surplus.
While some credit unions are doing well in keeping productive loan books and and gaining strong surplus, there are many that are lending money while bad debt is increasing and costs are rising.
The key to a successfully operated credit union is having a strong, knowledgeable board and head positions within the credit union, as well as remaining efficient and confident, especially with lending. Finally, creating links and strong bonds between other credit unions can help in Trinidad banking.
All of today’s credit unions, particularly those in Trinidad and Tobago that have been impacted by the need to make provisions for the impairment of investments, should be asking themselves several questions about making quality transactions and remaining a valuable financial institution. Credit unions should ask themselves if they can provide credit and positive Trinidad banking, especially in the face of rising costs. They should ask if they can still attract customers and if its practices and personnel the best. And lastly, whether they could be operating on a collaborative scale to be more efficient and resourceful.
There have been some major failures by banks and credit unions throughout the last decade. Still some, such as Eastern Credit Union in Trinidad and Tobago have made strong investments, remained an important business within the community and partnered well with other financial institutions. They are working to provide investment solutions and meet every day financial needs of the community. Despite negative publicity for banks and credit unions, there are still some positive signs that Trinidad banking will emerge from this time and be better and stronger in the future.