The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

A well-known credit union yesterday said it was poised for another “banner year” in 2014, despite a Central Bank of the Bahamas report noting that the overall economic climate meant key indicators of the sector’s health had “shown signs of weakening” last year.

While conceding that the National Workers Co-Operative Credit Union (NWCCU) has been battling loan delinquencies like other lenders, its chief executive, Alfred Poitier, said it has had to make adjustments and diversify its portfolio to cope with the issue.

“We have had to deal with some issues with regard to people in certain sectors,” Mr Poitier said. “This sector would be people in the hospitality industry who are pretty much seasonal.

“We have just had to adjust and do more to diversify our membership base to sort of mitigate any potential loss from that sector. For us it’s something that we have been battling over the years and something that we have learned to cope with.”

Mr Poitier added: “All of our loan products have a saving mechanism. We try to build up when things are not good, so that when things are bad there is some sort of cushion. We have diversified our portfolio significantly over the years.”

The Central Bank of the Bahamas’ annual financial sector stability report, released late on Friday noted that the sector’s delinquency ratio ended 2013 some two percentage points higher than international benchmarks.

The credit union sector is the second largest deposit taker in the Bahamas, after the commercial banks, and it has relied ever-more heavily on small-scale consumer loans to grow its loan/asset base. These now account for 72.5 per cent, or more than two-thirds, of the industry’s total loans.

“The majority of the credit was extended for small-scale consumer purchases (72.5 per cent), while mortgages/land purchases and revolving lines of credit accounted for smaller shares of the credit extended, at 20 per cent and 7.3 per cent, respectively, with agriculture, education, small and medium-sized enterprise development and other ‘miscellaneous’ loans holding the remaining 0.2 per cent,” the Central Bank report said.

Despite the sector’s challenges, Mr Poitier said: “I think we are headed for another banner year. We had a pretty good year last year and I think we are going to end this year on a good note.”

The NWCCU had enjoyed a “pretty good year” in 2013, with “record breaking” 14 per cent growth in its membership coupled with just under an 8 per cent increase in total assets.

Its 2013 audited financial statements showed growth of $7.4 million or 17.38 per cent in total assets. Membership, meanwhile, grew by 1,124 or 13.89 per cent.

Mr Poitier said the NWCCU was on track to see its membership increase even further in 2014.