Odd Cents - The Ultimate Guide to Credit Unions in Barbados

The Ultimate Guide to Credit Unions in Barbados

The value of credit unions in Barbados has been touted by the people of the country for many years. I’m not sure if it’s because of the many advantages which members find attractive. Members of the credit unions are part owners; the focus of the business model is to benefit the members; savings rates are higher than those at commercial banks; and the fees are a lot lower or simply do not exist. Whatever the reason, their popularity has grown and continues to grow with changes in Barbados’ financial landscape. For example, when commercial banks in Barbados introduce new fees or unattractive financial measures, some customers move their funds to the credit union.

History of the Credit Union

The origins of the credit union are steeped in a model that still holds true in some cases today. The first credit union was founded in Germany in 1864 when there was a “severe shortage” of financial institutions. This model soon spread throughout the world and was bolstered by specific instances and a need for a different type of financing. As a result, there are several examples of how credit unions were created around the world, to provide better opportunities for low-income earners.

One example comes from Quebec, where the first credit union was started in 1901 after a resident of Montreal was ordered to pay $5,000 in interest on a $150.00 loan. Another example was the revelation that Dora Maxwell established credit unions for the poor. Also, in the United Kingdom, credit unions were created to promote good money habits among the poor and to provide access to home loans. And, in Barbados, a group of low-income earners formed a savings union that would later be known as the Shamrock Credit Union.

Credit Unions in Barbados

The first credit union in Barbados, the Shamrock Credit Union, was founded in 1947 . Over the years, the movement has grown exponentially to a membership of 32 credit unions (as at June 2020). The Financial Services Commission, which regulates the financial sector in Barbados, provides the following list of registered credit unions operating in Barbados.

  1. Barbados Police Co-operative Credit Union Ltd.
  2. Barbados Public Workers’ Co-operative Credit Union Ltd.
  3. Barbados Secondary Teachers’ Co-operative Credit Union Ltd.
  4. Barbados Seventh-day Adventist Co-operative Credit Union Ltd.
  5. Barbados Teachers’ Co-operative Credit Union Ltd.
  6. Barbados Workers’ Union Co-operative Credit Union Ltd.
  7. Bartel Credit Union Ltd.
  8. BET Co-operative Credit Union Ltd.
  9. Bethel Circuit Co-operative Credit Union Ltd.
  10. Bottlers United Co-operative Credit Union Ltd.
  11. Caribank Co-operative Credit Union Ltd.
  12. Church of the Nazarene Co-operative Credit Union Ltd.
  13. City of Bridgetown Co-operative Credit Union Ltd.
  14. Courtesy Co-operative Credit Union Ltd.
  15. Endeavour Co-operative Credit Union Ltd.
  16. Family Co-operative Credit Union Ltd.
  17. Hinds Transport Services Co-operative Credit Union Ltd.
  18. James Street Circuit Co-operative Credit Union Ltd.
  19. Lifetime Co-operative Credit Union Ltd.
  20. Light & Power Employees’ Co-operative Credit Union Ltd.
  21. Moravian Church Co-operative Credit Union Ltd.
  22. One Heritage Co-operative Credit Union Limited
  23. Progressive Co-operative Credit Union Ltd.
  24. Prudential Co-operative Credit Union Ltd.
  25. Public Transport Co-operative Credit Union Ltd.
  26. Reliance Co-operative Credit Union Limited
  27. Shamrock Co-operative Credit Union Ltd.
  28. St. Leonard’s Co-operative Credit Union Ltd.
  29. St. Mark’s Co-operative Credit Union Ltd.
  30. St. Stephen’s Co-operative Credit Union Ltd.
  31. United Enterprise Credit Union Ltd.
  32. University of the West Indies (Cave Hill) Co-operative Credit Union Ltd.

The Largest Credit Unions in Barbados

According to figures available on the Barbados Co-operative & Credit Union League Ltd. website, the largest credit unions are:

  1. Barbados Public Workers’ Co-operative Credit Union Ltd.
  2. City of Bridgetown Co-op Credit Union Ltd
  3. BWU Co-operative Credit Union Ltd
  4. Barbados Teachers Co-operative Credit Union Ltd
  5. UWI (Cave Hill) Co-operative Credit Union Ltd

As at September 2019, there were 213,480 credit union members in Barbados.

Who Regulates Credit Unions in Barbados?

Specific regulations govern credit unions in Barbados. As mentioned earlier, the Financial Services Commission regulates all credit unions in Barbados. It was established in April 2011 and is responsible for regulating and supervising non-bank financial institutions in Barbados. The FSC licences and registers financial institutions; establishes standards for institutional strengthening; and promotes validity of the operations of financial institutions in Barbados.

Are Credit Union Deposits in Protected?

Under the current deposit insurance system, there is no protection for credit union deposits in Barbados. However, plans are underway to extend this protection to credit unions. Currently, deposits in commercial banks (up to a maximum of $25,000 per customer) are protected.

Products and Services Offered by Credit Unions in Barbados

There are several products and services available at credit unions:

  • Savings accounts
  • Term deposit accounts
  • Loans (Including lines of credit)
  • Mortgages
  • Financial education
  • Legal services
  • Wedding registry
  • Deposit and payment services
  • Grants and scholarships

At this time, credit unions do not offer chequing accounts; business accounts; or the ability to effect foreign exchange transactions.

How to Join a Credit Union in Barbados

If you are not a member of the credit union as yet and you want to join, you are making a wise decision. Membership in credit unions can be single, where you become a member on your own; or joint, where you and one or more persons open an account together.

To join a credit union in Barbados you should visit the credit union of your choice. One of the customer service representatives will guide you through the process of filling out an application form. However, remember that when you go to the credit union to open an account, you will have to present the following:

  1. Two pieces of photo identification (e.g. National I.D card; passport; Barbados Driver’s Licence)
  2. Proof of address (e.g. a recent bill or bank statement). If the prospective member is under 21, a parent or legal guardian can confirm the address
  3. A minimum opening deposit (this amount may vary at different credit unions)

If you are a first-time credit union applicant, you can join any credit union of your choice. However, if you already have an account at a credit union, additional steps are required. If you want to join another credit union, you must seek permission from your current credit union first.

References

Munich Personal RePEc Archive: The Contribution of Credit Unions to the National Development of Barbados
Barbados Co-Op League: Co-Operative Societies Act Cap.378A 
Odd Cents: Making the Switch to a Credit Union