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Credit union clampdown on defaulters

rhondathompson, [email protected]

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The Barbados Secondary Teachers’ Union Cooperative Credit Union is prepared to take legal action against delinquent members.In its 2010 annual report, the board of directors said the cooperative had been sympathetic to those members who when experiencing difficulty in repaying their loans responded to letters sent to them.“The loans of those persons have been refinanced. The monthly repayment has been reduced and the time period extended.“However, legal action will be taken against those members who have not responded,” the report stated.It was noted that while measures had been taken to reduce the level of delinquency to a manageable level, allowances must be made for some of the delinquent loans.Recently, Anthony Pilgrim, general manager of the Barbados Cooperative and Credit Union League, said credit unions, like other financial institutions, were facing increases in delinquency but it has not reached unmanageable levels.He noted that between December 2008 and December 2009 delinquency rose by one percentage point to six per cent.Meanwhile, Steve Belle, general manager of City of Bridgetown Cooperative Credit Union (COB),said while it would be impossible for a financial institution to be exempt from increased delinquency, COB was keeping it under control.The directors of the Barbados Secondary Teachers’ Union Cooperative Credit Union said: “Delinquency, if not carefully managed, can lead to the credit union becoming insolvent.“In expanding the bond for the growth and development of the credit union, we must exercise due diligence in the admission of new members and the granting of loans.”For the year ended March 31, 2010, total ordinary loans disbursed at 12 per cent annual interest increased from $2.35 million to $2.78 million – representing an 18 per cent increase over loans for 2009.Also, the line of credit loans that have an interest rate of 18 per cent increased from $164 176 to $167 705 – an increase of 2.14 per cent.The credit committee reported that over the year 110 loans with a value of $1.1 million were disbursed, with house repairs and debt consolidation being the main areas of demand.“The trend towards business development and construction is commendable and must be encouraged,” the committee said.Meanwhile, members’ deposits increased from $311 834 at April 1, 2009, to $329 725 at March 31, 2010, and the total assets of the credit union stood at $3.22 million. (NB)