FORMING a transition plan to strengthen satellite co-operative associations, the Department of Co-operatives is expected to graduate from its affiliation with unions to a partnership with the Central Bank of the Bahamas.
Melvin Edwards, the department’s technical advisor, said he is looking at creating producer and service programmes to benefit Bahamians.
“Over the last 25 years, the co-operative sector has been strengthened as a whole. Credit unions were the more successful component that they have really developed. Credit unions are financial co-operatives, where the customer is the owner,” said Mr Edwards.
“The profits from the credit union, at the end of the financial year, are shared with the customers. They take loans, they make savings, deposits, they are insured by the credit union.
“In case you die as a member, your estate or your nominee gets not only what you save but, a little commission on top of it. Only credit unions do that because the profits don’t go to a small group of owners. You don’t become a customer unless you are a member and an owner, so it’s totally owned by its customers.”
He said the credit unions are audited by external auditors, and are examined and inspected by the Department of Co-operatives on behalf of the government, because if a society is badly managed or badly covered, it may have to be bailed out by the state.
“To avoid that, the department is the regulator to make sure the members money is safe and sound. That’s the credit unions; these are the money co-operatives.
“The other co-operatives like the farm, fish, taxis, transport and the schools-based, save money and at the end of the year they get a lump sum back,” said Mr Edwards.
“I don’t think Bahamians are aware of what these societies now constitute. There are about seven or eight of them. The total assets owned by the credit unions to be handed over to the Central Bank, is in the region of $360 million.”
Mr Edwards said agriculture and fisheries account for less than five per cent of credit union loans.
He said the challenge now is to grow this segment again, as was the case with financial co-ops.
“The credit unions own about 95 per cent of the total asset worth. They all are going to be regulated by the Central Bank. They are no longer the oversight of this department because they have gone too big now. So this department has to start again,” said Mr Edwards.